I’ve said it plenty before and possibly even on this thread, but providing your personal information to anyone is never safe. This should be evident with all of the hacks that regularly occur. If you do have to provide your identity information, make sure it’s to someone reputable, but even then it could very possibly be hacked and stolen.
Knowing the fact that there aren't decentralized casinos or even if there are, they are not trusted for now, a gambler doesn't really have a choice if they want to gamble, they will have to choose a platform for that and that platform will obviously ask them to complete KYC verification at some point, now one cannot keep abandoning casinos only because they don't want to give away their personal documents to them.
So the only viable solution to this is that a person finds a casino that is reputable and trusted and only gamble with them so that if they are asked for KYC verification, they don't feel hesitant to do it knowing the casino is trusted and they can give their documents to them and they will be safe, somehow.