Has anyone used Sportsbetting and withdrawn funds?

All reputable sportsbooks have these types of checks in place. In fact some sites now also request that you provide a photograph of yourself while holding your passport. I've had some where I need to go to the post office and get forms witnessed and sent off to verify who I am. I agree it can be a major inconvenience.

Reason why they are so strict on this is because many people sign up multiple times to use the free bet offers over and over again, so bookies are pretty vigilant about it when people are making withdrawals. Not so much for the deposits (if you lose your money then it's bad luck, it's when they pay you out that they want to catch you and confiscate your funds.)

There are sites where you don't need to provide quite as much information for identity checks. For example bitcoin gambling sites are pretty relaxed and it's almost completely anonymous in some cases. But for the most established and trustworthy sites there isn't a great way to get around it.