If I were the owner of the casino, I would have allowed the guy to withdraw his money, or better still, unlock the account for him to continue gambling with all profits removed. This is fair enough after an open acknowledgement, repentance and apology like this. To err is human and for the fact that casinos can hide under some facts to outsmart their customers by using the terms and conditions to cover up, they should be able to forgive in situations like this as well.
Well, that's a good thought and I believe the owner of Shuffle should do something similar and allow OP to withdraw his initial deposit if not the winnings. I know OP has broken the rules of the casino and for that the casino may terminate his account and not allow him to gamble anymore on their casino but at least they should send his deposit back and that would be a smart move by the casino. If Shuffle wants to maintain their reputation and they want to get praise instead of hatred then allowing OP to withdraw the funds would definitely will increase other players trust on that casino.
Yeah, I also agree that the player's repentance firstly gives him experience and apparently in the future game he will not try to cheat like that anymore. On the other hand, the forgiveness of the player who has cheated by the casino gives this action of the casino administration a human character, aimed at a friendly attitude towards the casino's clients. Including this is an example of a good attitude towards the players.
So the right solution to the issue would really be as you suggest here.