I usually don't get involved in controversial issues such as these, since it may seem like I am taking sides, but I would like to add my perspective on this.
Enforcing a player to resort to legal action is a really, really easy way to scare away existing and potential players. Having your BTC locked up by a 3rd party is most bitcoiners worst nighmare - especially on exchanges. Although Betcoin has some reasoning as well as legal rights to keep the player's Bitcoin, it is not only unprofessional, but unnecessary and incredibly damaging to the casino's already diminished reputation. Casino's survive on reputation and holding up a mere 1 BTC is doing 10 fold of damage.
Like I said, I don't like to pick sides, but this thread has taken off and as a result I see it illogical to damage your casino's reputation permanently for such an insignificant amount of BTC. You may be just fine legally , but in the grand scheme of things that really doesn't matter to anyone besides the OP and sheds bad light.
This may be true, however it is also important that we discourage both this player and other dishonest players from coming to Betcoin, coming to other online casinos or cheating in general. This is not a new thing or something unique to Betcoin. Every online casino and sportsbook bans fraudulent players every day. The only thing noteworthy about this case is the attention it has received.
Using a proxy does not mean that we cannot see where you are playing from. Literally 10 minutes ago, we dealt with another player who was playing from a banned region. We asked him where he was from and he originally lied. We then told him that we know he is playing from a banned region and he admitted it and will receive his full account balance. Had he continued lying, it would have shown malicious intent. Instead, he admitted having lied about his location and in our opinion, that was not enough to withhold his balance.
The OP has not only played from a banned region, but created multiple accounts to abuse the tight limits that we have on low tiered matches. This is fraud and will not be tolerated. We want the community to know this. We also think that the vast majority of players, who are honest, know that if they play legitimately, they will receive their winnings in a timely manner and won't have to go through legal action. We pay out tens of thousands of legitimate players each week, many who receive much larger amounts than this player. As you said, this amount of BTC is nominal. What is important is the message we are sending that we will not tolerate abusive players. This player knows exactly what he has done and is playing the role of someone who is naive. He chose to sign up from a banned region and chose to cheat the site, knowing what was at risk. We have solid proof if this. If SBR doesn't think the proof is solid, they will rule against us and we will comply.