Let's see here.

"It is common policy among Bitcoin casinos that accounts cannot be funded from the same private wallets."
I've been gambling with Bitcoin for several years and this is the first time I hear something like this.

"This rule is in place primarily to prevent multi-accounting. With the prevalence of VPN (many undetectable), it is no longer as easy as "same IP, same guy.""
You forcefully KYC'ed 2 of the 3 people involved, giving them a 60 minute timeframe which is, again, something I've never heard before.

"Each player can create only one personal user account."
None of us have broken this rule.

"There can be no more than 1 account created per household."
Again, none of us broke this rule.

"Creating multiple user accounts will lead to termination of the accounts."
Yet again, none of us broke this rule.

"We understand that a service wallet was involved here."
It's called a hot wallet. Used in most, if not all reputable Bitcoin casinos.