Wazza, that's one of the reasons I think most of those terms and conditions could easily be challenged.
When you set something like that up, the terms and conditions should, without any doubt, be written by somebody with a legal background. Adding to them as you go along does not seem a very sensible thing to do either. This has been proven to be a hell of a mess over the past few weeks, and some of the stuff I now know is absolutely appalling. The chap "running" it has, it would seem, no business management skills, nor any customer relations skills. It might have been a good idea, and to me it seems as if it was, but he had definitely not looked into the possible pitfalls. It would appear that he never took any proper professional advice, and some of the stuff he has posted on here about his customers would have made Pattison cringe.
If he wants it to be a success he needs to get some real advice about how to run a business, the legal problems involved and completely rebranding, and he needs to do it quickly. If he doesn't I can see him causing massive problems for himself further down the line. What has gone wrong once could easily happen again, and it isn't just the chance of an abandoned game, there are other problem areas which need to be addressed. Most importantly he will have to change his attitude, his customers (especially the ones who put real cash in) are the lifeblood of his business, they should be treated as such.
He might find he'll have trouble getting anybody who has seen any of this to advise him, I certainly wouldn't.