May gambling money be used to donate a Sefer Torah to a Shul?
No, proceeds from gambling should not be used for funding the writing of a Sefer Torah. It is said in the name of the Baal Shem Tov that he once attributed a Torah scroll’s constant invalidations to the fact it was funded using proceeds made from gambling.
See: Shaiy Lamorah p. 243; Torah Vechaim 213; Birchas Moadecha Lechaim Derush 1; Chashukei Chemed Menachos p. 386; See also Igros Kodesh Rayatz 2,776