There are some casinos which legitimately request KYC and people accept it. I'll ask you one good question to answer yourself: Will you show your ID to random person which meets in you street? Of course no, but will you show your ID to a person that works in Bank and needs it for you? Of course yes. That's all. There are a lot of casinos and most of them are like random persons in street and there are some ones that are like official people in banks and etc. That's the whole idea and answer of this question.
In other side, maybe gambling is something that breaking the law in some countries. That is why people move to crypto because they can play casino and don't need to reveal their identity. If me personally it will be works if that official people in bank and etc is something that not break the law. But maybe gambling is different story.