I can't speak to any specific conversations that either Dooglus or subSTRATA had with this site's owner, or the owner of other sites. However if it were me that had found the exploit, then I would have told them something along the following:

"I have found an issue with your site that others could potentially use to steal from you, I have no intention of disclosing it to anyone other then you, nor do I have any intention of using such exploit personally, although I cannot guarantee that others will not use the same public information to exploit this same issue."

I think the above would pass the test of not being blackmail, while still being reasonably compensated for your time/skills.

The fact is that gambling sites are for-profit entities, and giving advice as to how to prevent yourself from getting robbed when large amounts of money is at stake should not be given for free. These sites should invest in the time/effort to prevent these kinds of exploits from existing in the first place.