You are correct that on a strict interpretation of the contract they are entitled to keep the money . The term was there to be seen.
However , you may have an argument that the term is unfair.
The starting point is to look at the purpose of such a clause which is to prevent the venue from suffering financial loss as a result of the cancellation.
This can be either that no one else books it for that evening , which remains to be seen how far away the event is and , given it is close to Xmas the event is, unlikely.
The other loss would be money they have spent in preparation of the event which again given how far away it is will be minimal if anything.
I would ask them what expense they have incurred and advise that you intend to seek recovery of a proportion of the deposit if the venue is rebooked for that date which a quick visit on that night will confirm.
Adviae that the matter can either be dealt with the way you propose or you are prepared to agree a reasonable fee now and both sides walk away.