The kyc is due to the casinos license. Otherwise Bitsler and every other site out there asking for it would not be asking for it. They have rules they have to follow unless they'd rather shut down.
Exactly, every online casino that is regulated is required to ask KYC if that's the order of the regulators. However, I have an account on Bitsler and I still continue using it without KYC since I did not receive any message for KYC compliance. I gamble on sports mostly, maybe KYC is not for every user?
If you can still transact within the amounts you used to, then you can choose not to pass the KYC, but if you are gambling with a decent amount, then maybe secure it now so you will not have some trouble in the future.
The best feature of a casino is anonymous betting, so KYC should exist, but, as the world is evolving and crypto getting recognition by the regulators, it cannot be prevented that they will be more strict and I believe what they only implement is the standard.