It is not possible to earn $1000 or more using free money. That guy is lying or he might have invested his own money and created the impression with his friends that he is playing with free money.
It is possible if we are talking about possibility, it is proven by some people who could make some money from free money.
I did it once in poker freeroll few years back when there was a promo of a new poker site.
I won the 1st place and I earned 0.25btc (not really remember how much was it worth in fiat)
Of course the chance to win big from free money is so small, but it is still possible if you have the luck.
do you remember the year ? if that happens when btc is at its highest , that 0.25btc is already a big thing and what is more cooler is that you only won it free . i particpated and won on a contest before but only the reward is fiat based and my wins is lower than yours but its still possible to earn money out of nothing if we are lucky . before i was like him , i never believed on people that brags especially if they brag big amounts . i said to my self that i will only believe on them if that happens to me too so i keep on trying .