It happens that /etc/hosts file doesn't support wild card entries.

You'll have to use other services like dnsmasq. To enable it in dnsmasq, just edit dnsmasq.conf and add the following line:

address=/example.com/127.0.0.1

Here is the configuration for those trying to accomplish the original goal (wildcards all pointing to same codebase -- install nothing, dev environment ie, XAMPP)

hosts file (add an entry)

file: /etc/hosts (non-windows)

127.0.0.1   example.local

httpd.conf configuration (enable vhosts)

file: /XAMPP/etc/httpd.conf

# Virtual hosts
Include etc/extra/httpd-vhosts.conf

httpd-vhosts.conf configuration

file: XAMPP/etc/extra/httpd-vhosts.conf

<VirtualHost *:80>
ServerAdmin admin@example.local
DocumentRoot "/path_to_XAMPP/htdocs"
ServerName example.local
ServerAlias *.example.local
#    SetEnv APP_ENVIRONMENT development
#    ErrorLog "logs/example.local-error_log"
#    CustomLog "logs/example.local-access_log" common
</VirtualHost>

restart apache

create pac file:

save as whatever.pac wherever you want to and then load the file in the browser's network>proxy>auto_configuration settings (reload if you alter this)

function FindProxyForURL(url, host) {
if (shExpMatch(host, "*example.local")) {
return "PROXY example.local";
}
return "DIRECT";
}

use dnsmasq

Assuming that you're using a Debian-based dist(ubuntu, mint..), check if it's installed with

(sudo) systemctl status dnsmasq

If it is just disabled, start it with

(sudo) systemctl start dnsmasq

If you have to install it, write

(sudo) apt-get install dnsmasq

To define domains to resolve edit /etc/dnsmasq.conf like this.

address=/example.com/127.0.0.1

to resolve *.example.com

! You must reload dnsmasq to take effect for the changes !

systemctl reload dnsmasq