What people/gamblers can do is to minimize the damage, and only play or give your personal info to those known long-running reputed website.
I agree if there's no choice after all.
Gamblers should be ready to comply with KYC especially if big winnings are experienced in the progress. We have no choice after all if that's the requirement before we can claim big winnings since we want that money. But for small winnings or something below $5,000 for example, KYC shouldn't be trigger here. Only for alarming, unusual, or something like that.
In a perfect world for us which like to keep our privacy we could gamble and win as much as we could and never have to go through KYC, but things do not really work like that, so as you say if someone earns a big prize then it is natural to go through KYC, however this is why it is important to choose a good casino from the beginning, as there are many people that get lucky and are happy about it and then get hit with a KYC request and then they are doubtful about doing it since they gambled in a casino with a dubious reputation.