This is the regular operation of some casinos. Casinos often take advantage of this kyc to cheat gamblers. Because they don't have any problem if you deposit huge amount and they don't have any problem if you lose all that money. But, their problem starts when you win big amount, they will force you to complete kyc. Because they try their best to see if they can somehow walk away without giving that winning fund to the gambler. So you should deposit in a reputable casino, so that even if you complete kyc at least, your personal information will be safe. As a crypto user myself I try to avoid KYC. But unfortunately it is true that many times I am forced to complete kyc despite my reluctance.
Not all mate but there are some casinos who put a notice if how max a user can deposit or play, and they also wrote if what is the minimum deposit so that users funds will not lost. Unfortunately, there are still casinos who works as you describe and maybe it's true that it's one of the ways to steal money because some gamblers won't just do a KYC and choose to abandon their account along with the money that they won.
KYC or not, no one will want to play on an unknown casino because they are afraid that it wasn't fair. If you really want to avoid KYC then you better start reading the terms and conditions of every casino that you play. That's the only way that you can be sure of.