Since you've mentioned me here: I don't like the banning of arbitrage betting. Even stronger: I think it's BS! I've seen cases like this before, and whether or not it's in their TOS, I think it shouldn't be. If casinos offer different odds that make it possible to get an advantage out of that, it should be allowed. Instead of banning arbitrage betting, they should adjust their odds to make it impossible. The casino's house edge should be more than enough to make arbitrage betting unprofitable.
I don't know how casinos set odds for sports betting. If I am not wrong, the casino does not control much as they use third-party odds providers. The third-party odds provider sets the rules. If a casino accepts the odds provider's TOS, then the odds provider will work with the casino. I don't think there is a single odds provider that allows arbitrage betting. So, if no one allows that, a casino has to choose one to run its business.
Your logic sounds like, if there is a chance to cheat, it should be allowed
(just kidding)