The "Satanic Panic" did have its local effects, as worked up parents bought into the hype. And hype there was! Mazes and Monsters (young Tom Hanks plays ersatz D&D and goes insane) came out in '82 and fed into it, as did the hyped up stories of a college student who committed suicide "when his character died" (actually just a depressed kid who never received the help and support that he needed, but never let facts stand in the way of a good hype, am I right?).
It affected my life in minor ways. I played D&D in the late 80s/early 90s in the middle of the Bible Belt (not far from Falwelltown, a.k.a. Lynchburg, VA) during the Panic. My friends were actually banned by their evangelical parents from playing, so we played in secret, rolling dice on soft book covers to muffle the sound. Even my agnostic parents felt the need to ask me about the game, though they never banned me from playing and seemed satisfied that I wasn't going to go all Jack Torrance from playing it. Another friend was allowed to play Star Wars D6 but not D&D. A friend I gamed with in the service from Detroit had a friend whose parents were OK with RPGs if there was nothing supernatural, so they used code words. Vampires became "Fuzzy Bunnies", for example, and the parents wondered why they spent so much time fighting Fuzzy Bunnies in their game. The owner of the local gaming shop in North Carolina where we were stationed at the time was constantly accused of witchcraft by the locals. Her response was perpetually "God bless you too."
It affected music too. Some folks were/are convinced that every rock band in the world were servants of Satan, including the Eagles (because Hotel California). The PMRC had high profile political support (e.g. Tipper Gore). It's all so ludicrous, but alas all so real.
So in my mind some government involvement (particularly local) at some point isn't ASB, particularly if there's a high profile killing or something (two gamer geeks get in a heated argument while gaming, likely over nothing to do with the actual game, and one hits the other with a metal dragon statue in a moment of anger or something). Some parent whose LGBTQ kid committed suicide after they were forced into "Conversion Therapy" might try and sue TSR because the kid played a character of the other gender ("they turned my kid queer!"). I mean, First Amendment concerns have never stopped politicians from attacking free speech on other fronts (music, books, comics, movies, TV, cartoons, social media, religions we don't like). So while flat-out bans are unlikely, I could definitely see politicians campaigning and fundraising on the panic, or using the panic as a distraction from real issues they wanted to duck. I could definitely see local efforts to ban playing at libraries and schools with some contentious school board meetings.
Attempts by local, State, or even Fed politicians to age-limit sales or put on warning labels aren't out of the question, IMO. Palladium Books even preemptively put warning labels in their books in the 1990s to cover their ass just in case. Possibly some "Comics Code" type BS as the industry circles the wagons.
