That's basically the logic behind the implementation of KYC protocols, to deter money launderers, scammers, and every form of malicious actors from using the casino as a way for them to store their ill-gotten funds without getting caught. Virtually everywhere in the cryptocurrency world you can keep your money without getting caught if you're a scammer, but if you want to use it in real life you'd have to run it through an exchange, or convert it to fiat through online casinos, good thing that most of them do these since at the end of the day it stops these people from being able to get a hold of their funds outright. And while it's a flawed system that needs some form of improvement to make sure that it doesn't inconvenience anyone but those that need to be inconvenienced, it's a much needed one.
Yeah, the idea of KYC might not be bad, but it really has a strong disadvantage that can cause harm to customers. mostly those KYC-centralised exchanges where users are carrying out KYC before they trade their crypto asset; perhaps if the government decides to launch an attack on Bitcoin investors, they can really get our details and login IPs from those CEX. Although, for casinos, it is also the gambler's choice to go on KYC or not. Well, in my country, there are more than 6 different online casinos, of which most of them that I use still have KYC compliance, but they don't make it compulsory until there is any need for it, maybe if a flagged bank account or wallet deposit is made to the casino.