if the punishment of accounts blocking is the price that ignoramus and stubborn gamblers has to pay, what does the casino do with such money after then? Do they convert the money for themselves or they have an authority they pay such money to?
They can do whatever they want to do with it; they will likely add it to their reserves. I don't think they need to explain this to anyone; its not even in their terms what they are going to do with it, and it cannot be questioned unless they confiscate it without due process.
To avoid this, gamblers just need to follow the terms, and they are good to go if they are not comfortable with the terms; they can just play elsewhere.