This is a case of the casino not understanding the mathematics behind the games they offer. Assuming there was no bonus involved, no betting system - i.e. raising and lowering of bets at specific pre defined times - will gain the player any edge over the house. If a bonus was involved, there is a possibility that the player could have a small edge, but given the use of a progression betting system and a high edge game i think that's somewhat unlikely.
It's far more likely that this group are just paranoid about any player winning - not a good sign - and has decided that a betting system that would occur eventually to even the dumbest gambler must be fraud. If beating the casino was that easy, there wouldn't be casinos.