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.
It's possible only if there are promos or giveaways the casino is offering. You're lucky enough that you were able to join and win. Before I always in gambling section even in alt for giveaways and promos but never win once. Today many casino offers free play but with no value, if we wanted a real play we need to deposit money and they have a percentage to give as deposit match and some free spins. So if you deposit big you can get percentage or more of what you deposited to start gambling. Casinos change their offers every now and then to avoid players who are not willing to deposit in their casino.