The IP-reputation damage is immediate. Cloudflare is choosing to pass the hard landing directly onto their customer instead of forcing their other customers to share the damage.
As a CF customer, I am happy that Cf is preventing another business from damaging mine.
The ToS doesn't say anything against gambling sites. Even if there was IP reputation damage, it's not appropriate to cut them off so immediately. Especially when they're a long-term paying customer.
As a CF customer, I am happy that Cf is preventing another business from damaging mine.