I'm not saying it's fighting money laundering, it's just that casinos are always vigilant in that case and we do know that online casinos are not the best destination, but who knows if someone is doing that in one of the casinos?
It is indeed very rare that someone gambles using money laundered from money laundering but casino vigilance is always at the forefront for the future of the casino itself.
If that happens, of course, casinos will be threatened with closing by certain countries because of accusations such as covering up evil acts of money laundering in their casinos.
From this case the casino imposed KYC on every customer who deposited large funds at one of the casinos to verify the source of customer funds.
The criminal who want to laundry his money isn't have any intention to gamble on the casino, but he just want to meet the minimum wagering amount in order to withdraw without get flagged by the system.
KYC isn't the best solution to fight money laundering, but it's add another barrier in order the criminal will be harder to escape and hide his identity. The only way the casino to fight money laundering is confiscate the funds and terminate the account without anyway to recover it, but most people will call the casino is scam.
KYC could prevent money laundering in any platform, not only in casino because with this, the transactions of each account holder could be monitored and reviewed, especially the moment the system flag something suspicious and unusual on the account. The system can easily pinpoint the account which has in and out transactions amounting to big amount that could possibly an act of money laundering.
While it cannot really fully eliminate and hinder money laundering acts, it could definitely lessen the occurrence. Once the account is found and proven to be doing something against the TOS, the casino can suspend, permanently ban, and confiscate the fund without ever returning it as a punishment for the fraudulent activities done.
KYC is also the way to control court risks for casino, and thats, I think, the key point, since launders need banks to take money from, and banks are the KYCest companies in the world. For casino, I suppose, the main thing to avoid laundering accusations is to work only with well-established leagues and championships. And issues like "he gave me some...", "this was mine not his...", "that's not my wallet..." way more often end up at the court, and in these cases the main thing is not laundering, but paragraphs like "funds seizure without consent" etc, and there are risks for casino to be forced to pay for such things.