The quick answers:
Multiple sites are created for there SEO benefits, or at the very least to target a different niche, but I suspect it is more for SEO.
PPC is pretty much a waste of money in this industry. Google, Yahoo and MSN won’t take your money if you have gambling affiliate links on your site, and the second tier providers are either fraught with click-fraud or simply taking your money for fake clicks.
Personally, I don’t feel this industry is nearly as shady as the online pharmaceutical market. Not to get off on a rant or anything, but playing at online casinos almost never leads to hospitalization or death. The point is, I think you will find plenty of upstanding business people in this industry. There are certainly some shady characters, we mostly refer to them as black hatters, but most people that communicate often here seem to be going the legitimate route.