I don't really want to comment on your incident with PrimeDice but generally I hate Gambling sites asking for KYC documents when they're operating on fake licences.Should they really wish to impose KYC polices on their players, they should do so while players creates an account or makes his first deposit.
Bringing KYC as a formality to delay or investigate wins/withdrawals is a pathetic attempt to disappoint customers.Be a responsible gambler and check if the terms and conditions beforehand.
Ah, I'm beginning to understand a bit of the background and context now but yeah, this really unfair practice should be stamped out.
It's very similar to many previously unregulated exchanges who did the same thing. Using every excuse in the book to withold a withdrawal. Like I said, there are some valid justifications but asking for verification documents is seldom ever necessary had correct security implementations been in place earlier - not to mention that they'd happily take your funds without first doing that verification. Shady at best, unethical and wrong at worst.
Dread to think about what all that data could be exposed to just lying around in someone's computer.