In your scenario, you're describing a sportsbook that I simply wouldn't play at, but I don't think Sportsbet sees their decisions as "arbitrary." You see them as arbitrary.
I'm describing Sportsbet.io.
Check the Terms and Conditions.
I don't see the word "arbitrary" there.
If I had lost my deposits, they would have allowed me to keep on playing more and more. Few seconds to register, deposit and play, but then more than a week to just recover my deposit. How does this even make any logical sense to you?
This is standard for most casinos and sportsbooks. Sportsbet is no different in this regard. It's not "fair," and it certainly benefits their business more than if they were to demand KYC from the getgo and check for multi-accounting before betting began, but good luck finding a sportsbook with competitive odds that doesn't do this, and let me know when you do find one.