ok, so thats not a final response, or it would say so specifically.
So they are saying they want bank statements, payslips and paypal account history because you won? wtf is that shit.
As they have confirmed it isn't an AML or RG issue then there should be no reason not to pay you.
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17.1.1.2
2 A request made by a customer to withdraw funds from their account must not result in a requirement for additional information to be supplied as a condition of withdrawal if the licensee could have reasonably requested that information earlier. This requirement does not prevent a licensee from seeking information on the customer which they must obtain at that time due to any other legal obligation.
I would email them back, linking to that and quoting what I posted from it, and ask them the reasons for non payment as they have confirmed what they are asking for is not a legal obligation, and the reasons they couldn't have asked for the information at an earlier point of the customer journey. I would also say that, at this point, it seems as though they are in breach of their LCCP, and do they have any comment on that.