Here is what what Dean said:

As you will have likely seen BetKing has been offline for around a week.
BetKing will remain offline indefinitely with this being the last in a string of problems over the past year.

A serious issue was found last month after we launched a new dice site to test if a new brand would have more success than BetKing has had post ICO.

The new site was a clone of BetKing. We had been talking to investors about doing a series of sites like this with a shared bankroll and this one was released in time to try and capture traffic from yolodice.com who were closing their investment feature.

After a few days players had drained the bankroll and withdrew funds from the hot wallet.

After a review with the developers we found that there was an actual flaw in the code that allowed anyone to view their server seed and predict the result of their dice rolls, essentially being able to win every bet.
It turned out that this code had existed on BetKing also since January on both the dice and burst dice games and people had been using it to win bets undetected. It is not yet known if a developer added this code deliberately to cause abuse or if it was an honest mistake.
It wasn't until recently, after processing larger withdrawals and then finding the bug, that the discrepency in balances and funds available was noticed with now there being no funds left to process any remaining withdrawals.

At the time the site went offline there was a backup of all balances and pending withdrawal amounts captured.
There are around 20 bankroll investors who had more than $1000 on site, for a total of around $400,000.