The amount they offered him (which he has until now refused) is the sum of his deposits minus his withdrawals. In effect he would be getting a full refund, and they would go about their business, quite literally. Somehow it's not ringing the "scam alarm" to me.
This is not my understanding. The OP placed bets with his deposit, that Sportsbet appeared to have accepted that turned out to be winning bets. The net winnings are excluded from what is being offered to the OP.
I understand that philosophy, but we don't know the whole story, and Sportsbet.io isn't obligated to disclose it. In fact, considering what it would take to prove their suspicions to us, they are very likely obligated NOT to disclose it.
What if the OP is from the US, or another probated location? Do you suggest they should break the law, and pay the winnings? We don't know what evidence they have, and I'm not trusting a bitter newbie over an established business.