Decentralized casinos, which operate on blockchain technology, sometimes offer an alternative to traditional casinos by providing more anonymity and removing the need for KYC but obviously they are not entirely foolproof either. As with any online activity, there are inherent risks so using the reputate sites, checking in the forum... those are required.
Generally decentralized casinos do ask for KYC data. If the need arises such as for big withdrawal or if they are suspecting any un usual activities then they ask for KYC. You cannot guarantee that your data is secure in a reputed casino. Data leaks may happen and sometimes they might not delete your data after closure of your account. There is risk but if you are gambling you are always at a risk. I do not think KYC data can be such a big issue for a gambler.
Decentralized platforms are not regulated, registered or licensed, so there hasn't been any instance so far where a decentralized casino asked its gamblers to complete KYC verification because the money that is being bet on games isn't going to them and then coming back to the gamblers because everything is done on-chain through smart contracts, so they don't need to check anything at all and that is what they do.
Though authorities have signaled that they might start regulating decentralized platforms too in the future, and if that happens and they are forced to register themselves and operate under a license, they will surely ask gamblers for KYC verification after that.
Some casinos that pose themselves to be decentralized are not totally decentralized. It cannot be decentralized and still be requiring KYC. Whose serve will recieve the KYCed data and for what purpose.
A totally decentralized casino is been hunted by the government and used for illicit purposes and that is why they do not gain much public popularity. Also the difficulty in setting it up is not what someone that just want to gamble for fun will want to do.
Yes, of course, the meaning of decentralization in general is to conduct a fairly anonymous policy of the casino itself, and it is obvious that at the same time the organizers of such a project are trying to maintain anonymity to the maximum. And even if such a casino begins to require verification of any identity, for example, according to the KYC procedure, it always looks very suspicious. It is completely unclear how, in this case, the legislation on the confidentiality of personal data is observed and how the safety of maintaining the databases of players who have passed KYC is ensured? In my opinion, all this is impossible and such data will somehow leak into the network.
So any casino that positions itself as decentralized and whose devs will claim that they require player data and KYC verification should always be a concern.
Firstly, such a casino only boasts that it is decentralized, but in reality it is not so at all. And there is a specific group of people who completely control it.
And secondly, giving your personal data to the casino, which from the very beginning lies about its decentralization, simply should not be done.
And if such a casino requires KYC, this is an indicator of such lies.