Please quote in the TOS where arbitrage is banned. I talked to a director of sales from Google and asked her directly about arbtrage and she kind of laughed and said no, arbitrage is part of business.
I dont have the link now, I read it on google.com that they are banning MFA arbitrage. Of course normal websites using adwords to bring in traffic and adsense to make some money is a kind of arbitrage, thats why I said its not all black and white. If you have a crap MFA arbitrage site, then expect a ban.