I have read through the conversation, and it must be painful going back and forth with no positive outcomes for you. I know these services do have terms and conditions, but I sometimes don't understand why they would just hold onto the customer's money for let's say failure to verify. A better approach would be to block the user's account, except the withdrawal function. That way, if the user fails to verify, they can just withdraw the money the deposited and have the account closed

Have you tried casino.guru? The KYC verification dispute is very sensitive and requires a mediator that has access to the documents presented by the accuser and the evidence presented by the casino. That is pretty hard to solve here.