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I understand they want to close my account for "security reasons"
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I'm not getting this. How can you understand that they closed your account? Only way I would understand a casino/poker closing my account was if I done something that breaches the t/c of the site.
I'm not saying this is the case, but I think it's strange you accept it so easy that they close your account.
About the 1700, I think if you are legit and there were no strange things happening with your account/play. They should refund it..