Ah, I'm beginning to understand a bit of the background and context now but yeah, this really unfair practice should be stamped out.
They will be, if players start to abandon casinos that impose such horrible polices.
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.
My point! Either impose polices as soon as the account is created or don't impose them at all.
Dread to think about what all that data could be exposed to just lying around in someone's computer.
Exposing such confidential data does need you to be a authorised service provider which most of the gambling sites aren't. Hence, they shouldn't be trusted with KYC documents either.