For any Casino that is under the law of any jurisdiction, or being regulated by authorities of any jurisdiction, I can say that I believe its a sham when any of such casinos tell us that user's data are encrypted, I do not believe it at all.
But even if truly, users data is encrypted as they claim, the encryption may likely be against scammers and hackers, not against the authorities, for I know that casinos will remove any encryption when it is requested for by the authorities.
Almost every licensed and centralized casino that requires KYC say that they have to comply with AML and regulatory rules that are imposed by the authorities, knowing that fact, it is obviously not wise to think that there can be encryption of users' data for the authorities, because how would the Anti Money Laundering authority check if the users are not going against the rules?
And, if someone is caught or suspected of being involved in something that goes against the laws, their data is definitely shared with the authorities, so there is basically zero encryption of users' data when it comes to authorities behind the casinos.