Closing accounts is entirely at your discretion. If you want to close an account for whatever reason, nobody should tag you for that. However:
close your account and confiscate the funds if
This is the part that can make or break a reputation. You shouldn't confiscate funds for anything less than cheating (for instance abusing bugs). And even then, you should be very careful as confiscating funds is a killer for online reputations.
It doesn't have to be that complicated to reimburse people if their account has to be terminated. All they'd have to do is return any balance and winnings that is still in the account. And they have to discuss with each customer via email individually to work out a way to return the money to them, since sending them back to depositing addresses is risky. What if the customer threw it away, or they used multiple deposit addresses?