You are scammer, don't argue, if this is your system glitch, you should compensate him all the winnings, his betting way is acceptable in other legit bookies, if you don't pay, therefore you are scam.
If you ran a sportsbook, accidentally offered @10 on the heavy favorite which was normally priced @1.05 (system glitch) and someone placed 10 BTC on it, would you pay it out? Probably not. I've had good experiences with mBitCasino's sportsbook with my arbitrage betting, and I haven't encountered a problem. I think their actions were (at least partially) justified.