The gambling without license could have been the best because most of them would have been non KYC gambling casinos and they won't require KYC informations from us as well as seing them not regulated by the government since they are not having any license to back that up, but can we have the required trust in some of these sites, how reliable could they be in such a way that you will not see them taking their users fund away at anytime when they cease operations.
I think government play a very big role in the trusting aspect as a non licenced casino shouldn't require. kyc registration for it users( the gamblers) or maybe we could just have this registered casinos without having to undergo the kyc process leaving almost all gamblers as anonymous (although not too anonymous) as they aren't going deep into kyc but with these some might still want to do some illegal stuffs so I think government is actually monitoring the inflow of the money just like they wanted to monitor mixers
If a business can provide the government with the opportunity to collect taxes, the government will enforce the regulations. The government will ask business owners to carry out KYC on business members. Apart from taxes, the government must also check the flow of funds from the business.
This is to ensure that no one violates the regulations implemented by the government. And now, as crypto gambling grows in popularity, governments are getting curious. The government wants to know how much money there is in this crypto gambling business. That's also what made the government regulate KYC in crypto casinos.
There may be other reasons we don't know because we are not part of that government. Even if we are government members, we can not explain in more detail.