If I remember a video I watched on the subject correctly, creating a safe space for kids on the internet was the explicit goal of Club Penguins. Good moderation was a selling point in a time when most parents wouldn't let their kids "surf the web" alone (rightly so...).

Now that kids spend almost more time before the screen than not, and that the Overton's window been shifted to a place where it has become acceptable to market digital casinos to kids, no one bothers with costly moderation anymore.