I agree with your point of view, It's true that in recent years there have been several cases of laundering stolen money through online casinos or crypto assets.
So don't be surprised if casino sites require conditions to make KYC.
Parties from the casino also do not want to be involved and be harmed in any form by the laundering of stolen money carried out by irresponsible persons.
And the criminal is submitted someone KYC that he bought from a person who sold his identity since he's poor. Does casino asking KYC will prevent from money laundering? nope, does KYC make the criminal harder to do bad thing? yes. This mean asking KYC is useless if the criminal know how to escape from it. Now we have blockchain analysis who can track someone coins, but they still can't catch those criminals since they're more clever.
A criminal certainly has many ways to escape and be free from his crime case.
But at least KYC can minimize this crime.
Indeed, it's actually easy to buy someone's identity to be able to make KYC and abuse it.
But in my opinion, in today's era, there are many smart people who don't want to sell their identity. Many of them are starting to realize and have thoughts and understanding of the importance of maintaining identity so that it is not known by others because it can be misused and in the end we are the ones who are harmed.
With todays internet popularity, many have been aware on what kind of risk is selling their identity to others but sometimes others have no choice especially if it is their only choice in order to survive their daily lives. KYC is not bullet proof but yes it makes criminals to do extra steps in committing their crime. There are still people who are faking their identity in KYC since I can still see some advertisements that someone is paying for a service on doing KYC. There will still be people who will try to beat the system no matter how hard the process it would be.