This is exactly right twitchyseal, we had to convince the CEO of Betsoft to make a payment here and they did.  There were other issues involved like it was a free / bonus round and those shouldn't payout jackpots we were told but this wasn't clear.

First, it is important to understand when you play casino games from a software provider you are playing on the software provider's servers directly through Betcoin or another online casino.  The operator, Betcoin has no access to the games and cannot change them in anyway.  Equally, when you are playing a progressive or jackpot, the casino software provider pays these wins out because it is based on the players of all online casinos using their games.  This is what enables a very small casino to pay out a large jackpot, because the software provider pays it out based on their much larger overall player base.  

The software provider pays the player in these situations as was the case here ultimately after lengthy conversations.