I agree with you, straight KYC after registration is sure far better and easier than having to go through KYC after one have won a significant amount of money and wants to withdraw, but the casino insist that the customer must pass kyc verification before his or her withdrawal will be processed.
It's not going to change about the possibility investigation, an unverified account will be asked to submit KYC while the verified account will be asked to submit KYC too with a reason of check whether the account is still controlled by the original owner or not. Even you've submit your KYC, they can ask more and more KYC or they said the images are blur etc.