I did a quick search through Cloudflare's TOS and did not find anything about gambling. What was the TOS violation here?
What I'm seeing is Cloudflare communicating very poorly about what actions the customer would need to take to keep their site operating, why, and what the timeline would be. "We've determined operating your casino website on Cloudflare IP addresses is an unacceptable risk to our other customers and we require that you upgrade to an Enterprise plan within two weeks or your service will be terminated" is clear, concise, and I believe entirely fair. What they did here makes me think they're an unreliable and unpredictable service provider.