It would be casino's fault when they were banning the users from unrestricted country without noticing them before. They have obligation to tell the users from the country that will be restricted to empty their account. So if they have told users, then users are still stubborn to play and get a ban. It's not their fault, but the player.
However, it's player's fault when they were coming from banned country, and still try to pass it by using VPN. So it's pure player's fault for not comply with the rules.
Yeah but still, they have to allow such user to withdraw their funds, right? They shouldn't have allowed to deposit this user, in the first place. I know it's complicated because the user could have registered and deposit using VPN, but I think punishing him/her with taking all their money is harsh, in my opinion. I hope legally they have no right to do that. Only police and the government can confiscate someone's money, not a gambling site.