Yes, it's grammatically correct.

Student or Learner
I am wondering if my sentence is grammatically correct.
For the money Peter had gambled away in the past, he could have certainly bought a few houses instead.
Yes, it's grammatically correct.
“Every miserable fool who has nothing at all of which he can be proud, adopts as a last resource pride in the nation to which he belongs; he is ready and happy to defend all its faults and follies tooth and nail, thus reimbursing himself for his own inferiority.”
— Arthur Schopenhauer
I'd use with the money.
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