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
Casinos with licenses will have to obey with AML/ KYC and I believe you are in cryptocurrency market, cryptocurrency gambling industry with enough experience to know that casinos can ask KYC on users anytime. It is in their Terms of Services and they have points in their ToS that in some conditions, they will ask KYC even their casino is not KYC mandatory.
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.
KYC/ AML is mandatory with platforms and difference is only how they enforce KYC, AML on their platform. They might have those KYC/ AML terms but sometimes don't enforce it too strictly.
But if they do it too softly, they will face with lawsuit and expensive fee like Binance had to pay months ago.