I don't think they can keep the money, they have to inform a law enforcement agency of their findings and turn the money over to them... I'm sure the laws and procedures vary by jurisdiction, but if they just keep the money they took from a player, that's theft.
And if they report it, the player himself should probably get in trouble, an authority should investigate him and see what the person is actually doing. And if everything is in order, a player/person can file a complaint and they should return the money that the casino took from him.

But is this also the case with crypto casinos? I'm not sure and I believe that not all casinos are honest and fair to their players... unfortunately, the crypto gambling space is still the wild west and there are a lot of strange things going on.