But that's how it is because the government also supervises the licensed casinos so they have to follow the regulations from the government. If your winnings aren't as big as everyone else's or under $100, the casino will let you withdraw the winnings. So get ready to do KYC. The casino may ask you to do KYC if you get a big win.
But I think if the casino is reputable and we always use it, it means we already believe that the casino can provide security for the data we submit to them so we can do KYC safely. And if you really don't like those ways, maybe you can move on to another casino that doesn't ask you to do KYC. But everything will have a risk behind it so we should understand the risks and be able to choose what is good for us.
Any casino needs customers, so casinos are interested in being as loyal to their customers as possible in order to keep them. The passage of KYC is regulated by law, while casinos must ensure that there is no fraud during the passage of KYC and all user data is stored in a safe place.