Treated someone like the Welsh have been throughout history, that is ripped off. So the winner of a bet may recieve a welsh prize - nothing. From the outdated adjective welsh - meaning disadvantaged(in poverty and fate).
TheTruth : Yeah Dave did win the bet but I think he may be Welsh so it doesnt count.
Dave : I've been welched
Dude i was welched last nightsupposedly i made love to a jar of peanut butter.
I was welched last night, I had to go to the hospital and they stuck a cathater in my pee hole.