Think any good parent would be devastated to see this happen to their child.
I would certainly want her to end things with him, but she has made it clear that she isn’t prepared to do that. And this stance is affecting your relationship with her. So it’s time to change tact.
As PP have said be there for her. I would try to get the message across that if she wants to support him emotionally and help him get over this addiction then that’s a good thing to do, but what she absolutely cannot do in bail him out. She needs to be strict on this and not pay any debts, or even pay for his share of household expenses.
As PP have also said it is worth considering how true this all is. Is he allowing your DD to view bank Statements so she can see the extent of the problem? She needs to be able to see how long this has been going on for, to what extent, if it is still going on and if he actually had the money in the first place. It may be a difficult subject to breach with her, but I think he owes her this if he expects her to stay.
Also finally it sounds like you have a really good relationship with your daughter. I’m assuming due to the sensitivity of the situation few other people know. Is there any other family members/ close friends who know who might be able to advise her on the above. Sometimes no matter how great the mother daughter relationship is, it can be hard to take advice from a parent.
I was briefly involved with a guy who had gambling problems and lots of debt when I was younger. After lots of heartbreak I realised that he didn’t really love me and no help I gave him would change that. Thankfully I hadn’t leant him huge amounts of money as I was skint myself and he did eventually pay it all back. But the mental side of this will always be at the back of my head and I’d always be wary of anyone with high levels of debt and addiction.