The biggest issue in this is probably "what is sexism in art?". Assuming that we have a perfect system, or machine that can determine with nigh 100% accuracy whether or not something is sexist - and please don't comment on the implausibility of such a scenario, the point of it is to reduce the parameters of this thought experiment down so that we can focus on the concept of interfering with art - then I don't see much of an issue with this, at surface level at least.
One ideal that people seem to hold as absolutely necessary is freedom of expression. While holding that view, as art is by its nature - expression, freedom of artistic expression then follows naturally. Whether or not video-games are wholly art is an issue of itself of course, given their consumable nature as well as artistic one, akin to whether or not propaganda art is more or less art than that with a more organic, or natural aim. Taking video-games as art to reduce our parameters further, the biggest issue becomes - is freedom of expression necessary?
Now, say you had a preacher. Not necessarily a religious one, mind. And the teachings of this preacher were of racism - white supremacy, advocacy of serious discrimination due to race, segregation, etc.. Would you find such preaching to be favourable in society? Essentially, preaching that advocates racism, a concept that society has thankfully progressed towards finding deplorable and unacceptable. My response is certainly no. While I'm all for freedom of expression, when that expression begins to seriously infringe on someone else's rights and freedom - and while you have the right to offend, offense based on race is unacceptable in society - it becomes problematic, which is why racist outbursts are illegal in many countries, even if the actions (ignoring speech) aren't themselves racist.
Now, if you consider art to be expression - then you can certainly have art doing the same thing. You can have art, which has an expression which is wholly racist. While this is difficult to imagine with a painting, it's easier to conceive of within a film. And applying the same logical steps we've taken earlier, it now seems reasonable to ban, or at least penalise, it. As restrictions on freedom of thought should never be tolerated and artistic expression is much easier to avoid than someone spouting racist rhetoric in your face, the banline in the sand is much harder to draw, hence why penalties can be preferable. Penalties such as not giving tax credits. Alternatively, you can say that you don't want to penalise art, but such opinions should not be impacting a child (would you want a child to be adopted by a self-professed racist?) - hence you slap an age rating on it. Looking at it this way, you can see why such actions can be reasonable. Now we flip racism to sexism (doing this avoids having to distinguish between sexism and sexual freedom, as I've focused on negatively charged aspects of the -ism), and say that we don't want to promote sexist ideologies, so penalise them monetarily and don't allow them to be exposed to impressionable children.
