obviously gambling sites are being abused by this money launderers so thats the reason why Governments are getting paranoid(or better say they are exaggerating things)
A individual can use the sites to transfer the amounts to crypto and withdraw as if he was using mixing company,so the abusing is indeed
I don't think there's any kind of interference by the government that would stop crypto gambling from dominating the gambling world in the nearest 5 years. It's very visible that cryptocurrency is leading the market and most owner of gambling sites already know this and are now cooperating with it.
I can't even recall the last time I used fiat in gambling, not when there are a lot of intriguing casino site with amazing bonus offers that cannot be received and coupled with the fact that our identities are hidden. The advantages of crypto sites is far more than fiat and I am very convinced that fiat gambling would go into extinction sooner or later.