In fact, governments are not even interested in casinos as long as they aren't used for money laundering - which is pretty much impossible since the majority of them use stringent KYC.
Right? I remember a thread regarding a casino asking street verification shit. That's a strict and shittiest KYC verification asking some player or you can say an excuse to confiscate their balance.
The worst excuses and miserable treatment I saw is with PayPal especially when you are travelling abroad and I assume they were one of the earliest to ruin Internet usage with their stupid requirements. So I won't be surprised to see others following their steps with such conditions. There is KYC renewal in some casino or services that might be simple or too complicated to piss you and lock your money in case..
KYC is implemented to avoid money laundering and to reveal people identity to governments in case of trouble so the service can continue to operate smoothly without the hassle of being shut down.