Do you have the transaction id which can be checked and confirmed on the blockchain? That would provide your claim with a little more substance. Right now, I cannot say if their reason for closing your account is a correct course of action or not because I do not know their side of the story.

At the very least they should return your deposit but the lesson for you and everyone else to learn here is you must read terms and conditions when you sign up to any casino or gaming website and you must be prepared to still not have your funds released even after you send your KYC.

There are many scam websites that claim to be legitimate but they are a front designed to fool people in to sending their personal documents to them. I cannot say this is what is happening here but you should be careful.