There should be clear cut laws surrounding clear errors, like there are in most places, and ones like this should not be forced to pay out.
This situation is much more comparable to, say, ordering something from a store that turns out to be out of stock. The store has to refund you for the sale, of course, but that's all they are on the hook for. They aren't punished beyond that, they don't even have to go out and find the item for you.
Otherwise there is no honor and incentive for them. Bookies have to live by their honor.
There is a difference between:
Ouch, that stung! Must do better.
That amount kills the business!
They own my whole enterprise now?
This is a sting. Quality control tax.
They should pay up, suck it up, maximize good will, and prevent it from happening again.
Given this gaffe, it is even odds they have pocketed more than this amount from errors going the other way.