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If the government forces them to apply KYC for their members, the casino can not do anything except follow what the government wants. They will explain to their members that KYC is now part of their casino and asks them to fill the KYC. The casino will transparent to their member and will try to hide something and after the member fills the KYC, they can give some bonus or other things to make them happy.
But if the casino can choose between applying KYC and not applying, the casino can select both choices for their members. That will also give an option for their members to complete the KYC.
There's no forcing in the side of the government, everyone has to comply with the law even if it's just on the surface. I don't think that casinos will want KYC if they can avoid as much as possible so I disagree with your idea that they are going to do both if there's no need for compliance.