The lack of alternative venues for gambling PPC has pushed the prices at 7Search higher and yes, they do still allow online gambling ads.
Personally, I’ve never had a problem with the quality of traffic from them. It’s not as good as AdWords/Overture was, but the campaigns I’ve run there have always pulled a profit.
I do wish they had more traffic though and more high quality partners. Surely the serious sites wanting to display online betting ads at 50% rev share or whatever should be partnering up with 7Search.