I witnessed this going on, and I am with @WeAreNumberUno for this case.
Here are my reasons;
It is your own choice, like any other chest shops, to click on the chest and purchase, even for extreme amounts of money. No matter what anyone says, they cannot make you buy something. Their promise can be false, and they might lie to you that there are only 5 dirt left for 2000 meebles each. However, the chest shop is technically legal because the customer is buying what they want and are agreeing to buy in the specified price by using the chest shop. Therefore, the actual exchange of goods and money in this case are completely legal.
As for the gambling part, there are no ways gamble without risk. If you are assured that you will win 100,000 meebles, than that is not gambling because you are not taking a risk. Therefore, the customers of /pwarp dwarf should not be complaining that they got scammed because they took risks and lost. By agreeing to gamble, they are to abide by the owner's ways and if the customer took a risk and lost, it is not the owner's responsibility to refund.
Therefore, I say that the gambling machines in /pwarp dwarf are completely legal.
However, I agree that the advertisement was irrelevant to the actual gambling situation. Whether Dwarf did or not, it is illegal to provide false information or promises to get people to do something. If Dwarf provided false information, then this should be handled accordingly by staff with evidence.
Overall, the pwarp itself is legal and should not be an issue.
~Natsu