Presumably the cost of implementing KYC/AML runs into billions or either because it is "hassle" at somehow to the gamblers that would like to play, but requires first to do KYC in which is embarrassing.

In general, majority of the gamblers hate KYC. They tend to avoid those gambling sites that demands it, so that's why gambling owners don't implement it because gamblers will just avoid them and just go through other gambling sites that don't require KYC.