kyc is a personal matter and some casinos make kyc mandatory. But it is true that kyc is only used for the protection of one's personal account and on the other hand casino sites use kyc to prevent users from doing other bad things like money laundering. so doing kyc is not bad. But must choose a trusted and reputable casino for doing kyc. Otherwise it is not impossible that kyc documents can be sold in the black market
for now almost all licensed crypto casinos ask customers to do KYC on their gambling sites, especially gamblers who use large funds. well, casinos implement KYC to check whether the large funds are from money laundering or indeed from personal money owned by gamblers.
but unfortunately KYC can be abused by gambling company owners to sell to bad people. that is what some anonymous gamblers fear.
actually doing KYC on a gambling site that is popular and has a good reputation a long time ago, for me is fine. unless doing KYC on a new gambling site I am very careful to do that.