What are they playing that 3 yrs puts her at an advantage? Running? Reading? What if you change it up so that there isn’t an advantage. Like candy land, chutes & ladders? Or do team games. We play games like uno, yahtzee in teams so they learn strategy & have a chance at winning. Praise the looser for being a good sport. Seriously I praise my adult son so my littles see that it can be handled & noticed when you loose nicely.
Let him be sad about not winning. Giving in isn’t helpful, he needs to get used to losing because it’ll happen in life. He needs to learn to deal with disappointment.