Prison may provide important lessons for people who are addicted to drugs. However, for gambling addiction it is much more different. Because, reflecting on what I found around me, there were some who were caught by the police selling illegal lottery, after they were released from prison they repeated the same thing. Even he was in and out of prison several times did not make him stop. I think the most appropriate thing is family support and/or a psychiatrist to improve psychology so he can live without gambling.
Depends on the prison. It's not hard to get drugs there. Prisoners are smuggling drugs to prisons all the time, mostly in their assholes, but sometimes swallow during private meetings with their wives or girlfriends and shit it out later. An addict in prison is going to learn new trades like how to hide drugs and signs of being high, how to cheat piss test and many other.
A drug addict needs a good rehab, not prison.
You can try to talk with your brother OP and tell him you know everything and he's going to destroy his life. Tell him to do the math. He's losing money all the time so maybe he's just bad at gambling. It's not a streak of bad luck that will change for him but a permanent situation. Ask him what he's trying to achieve because nobody becomes rich from gambling. You can win some money but you will never change your life for the better.