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The only thing that makes this KYC processes stupid within crypto gambling platform is that most casinos are abusing it. It is also often that they ask KYC even though they do not have any license, there's a point but a lot are doing it just to take advantage of the KYC being imposed. It also became stupid because the documents gathered using this Know Your Customer process can be used on identity theft and other illegal related schemes.
for certain countries have their respective rules requesting KYC on gambling platforms is important to prevent illegal acts that violate the law, besides that it can limit the age of its users, because it is feared that an early age can be involved in gambling. maybe centralized gambling will impose KYC on its users because there is already a collaboration between the two so that the platform can be accessed with protection and not something stupid
This of course applies to gambling platforms that are legal in certain countries. I'm sure most people prefer the absence of KYC because it's simpler and follows the decentralized nature of cryptocurrencies