Still on the case, 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?
Most of the time casino refund the player deposit despite players violate the ToS. Only the profit will be confiscated that obviously will go on the casino bankroll again which is the original source of the funds.
On case that the funds was confiscated due to AML security reason, I think the funds will be frozen until it was legally claimed by the government which is probably same storage of their bankroll.