So that's all? countries where gambling is legal do not have laws or institutions to protect gamblers from online casino fraud? So how does a casino license work if gamblers cannot report or protect their gambling activities?
There are laws that protect gamblers from online casino fraud but the problem is tracing the perpetrators. This is also one reason why the government does not hesitate to shut down any illegal online casino operations if ever they found out that the casino audience is from their country and yet they do not have any license to cater to their citizen.
If the difference is only about KYC, then I think gambling from a prohibited country and not doesn't seem to have a significant difference, and VPN can be used to access gambling sites by changing the IP address
The implementation of region restriction is not for the players protection but rather for the casino protection. Since a country deemed gambling as illegal, operating or catering their citizen means the casino is violating their law and by that, the government can go after the casino and file cases that can penalize the casino owner.
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https://www.everycrsreport.com/reports/97-619.html