Because it's financial fraud, and it harms the legitimacy of the market itself and it harms the other people participating in the market. It's not like banning a cheater in a video game, there are real world stakes.

If video games have real world financial stakes(say, for professional eSports players like Dota/LoL), should cheating be punishable by jail time?

Maybe.

If we are playing poker, and you cheat, you have stolen my money through fraud.

Certainly if I cheat at a casino, I'm likely going to jail.

Bluffing in poker is not cheating, is it? This guy bluffed that he want to sell when he did not.

I believe if you cheat at a casino, you are just banned and kicked out.

Also, perhaps there is a differentiation between working within the mechanics of a system to cheat, and going around a system to cheat. An example from the esports league would be the difference between using a corner case to shoot through a wall, versus hacking into the server and modifying the code.

If you don't cheat, but do something the casino doesn't approve of you are kicked out. If you actually cheat, and the casino decides it is worth it, you'll have the government come down on you too.

It actually is.

It kicks you out of the market by sending you to prison.

It's a scheme to get money by being dishonest; so it's stealing.

>get money by being dishonest; so it's stealing.

That isn't the definition of stealing. In fact I would argue, while it is dishonest, it isn't stealing in slightest. Stealing means you took something, without agreement, that rightfully belongs to someone else. The scheme is more accurately described as fraud than stealing.