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.
When cryptocurrency casinos were first introduced, there was no KYC or anything like that, no one had to verify their identity before they could access certain features in a platform such as making large deposits or withdrawals or participating in certain events. You could deposit any amount you wished or withdraw any amount no matter how large, and it would get processed in a matter of minutes. However, over time, due to regulatory pressure, rules such as KYC and AML started popping up. Casinos were asked to acquire licenses to operate.
The licensing part isn't very bad in my opinion, because platforms that are registered with authorities would have a lower possibility of scamming its customers and run away with their funds, which isn't the case with unregistered and unregulated casinos these days.
The grievance of people buttress towards the way and manner cryptocurrency was introduced. Cryptocurrency mostly promised decentralization, privacy and anonymity, but the situation now is beyond that. Despite most of them still retaining those characteristics/attributes, the government has found ways to limit them by regulations through the companies and individuals transacting with them. This is a brilliant idea and I will always support it. Cryptocurrency cannot just be operating the way people want unchallenged, not when there are still working governments in the land. Fine, when it first came on board, the government would certainly be unaware or taking time to know how to deal with the situation. Those are the times you mention.
However, when they came up with their regulation, they changed the narrative, and crypto on its own can keep the necessary privacy and other characteristics, but once a company or regulated/licenced entity uses it, the same can't happen for the parties involved anymore. This is the rule unless they are not registered in any country, which can make them do as they like and even encourage their customers not to complete KYC. In the absence of that, due process must be followed. This has never stopped the true capability of cryptocurrency itself but just makes those using it more accountable. We should all respect that in this present dispensation.