Well personally I have no issue with the prizes and I doubt that they would want to scam or tarnish their reputation like that so its not really an issue for me regarding that but the KYC really pisses me off. If they do actually require KYC on their site there should be atleast some sort of notification or warning before a player create an account or before they made a deposit onto the site so I really wanna know their stance on this
Identity verification is not mandatory but just like any other custodial service that has the typical KYC/AML policies for compliance, they can ask for it anytime if they deemed so -- pretty sure you can find this on their terms of service. And I think that's what happened in your case.