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I think already have some change on KYC.
Only old user can play without (KYC) before these updates and changes to their term & conditions. Right now users are required to pass (KYC) before they can gamble. Here some discussion:
https://stakecommunity.com/topic/89708-stake-forces-kyc-for-new-users/ on the discussion the @OP are being force to KYC after he was register to the site.
I think we already had this discussion a long time ago, while new user needed to passed KYC first before they can access or gambling on Stake. Old user still can play without (KYC) even my self still can play without KYC (but there is no guarantee we still can play it without KYC) because KYC might be force to any user are still not being verified to verified their account.
I think that needs to be confirmed, as I don't think there's an exemption to the rules. Just like an exchange, if you can trade without a KYC and then eventually the exchange requires everyone to pass the KYC, then it should be addressed to all users, not just the new ones. The same goes for the casino. Although I haven't followed a lot about the KYC update since I have not faced any problem gambling without KYC, this is the kind of logic I think. So I want to know if someone new here who has registered in the casino was able to play without a KYC, or not anymore.
Everything has changed now and will not be the same as a few years ago whereas we can playing gambling or trading in the exchanges without pass the KYC. With the popularity of crypto makes the governments feels it needs to be monitored by them so the governments asks the exchanges and casino to use KYC verification for their members.
You can pass Level 1 verification without any problem and you can also continue to Level 2. But that will be depends on its user because some people will prefer to do Level 1 verification. Maybe in the future, the rules in the casino will be strict than now where users must doing other verification things and that will be a requirements from the government to the casino and exchanges.