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If casinos stops KYC procedures it will become so risky because it definitely will be the refuge of money launderers in the sense that they will feel they can just deposit money in their casino accounts and make withdrawal whenever they wish to and any system without regulations makes it become porous because there will be so many irregularities and untrusted activities that will be going on and a lot of people may not even like to use any casino without KYC requirements since it is mostly fraudsters and criminals that doesn't like their identity to be known when involving in any financial dealings with any company or organization.
There is so much talk about money laundering through casinos, but I don't think it is very widespread. And how much money can someone launder through the casino? Without losing most of your money in the process... All in all, I believe that KYC does not help much, whoever wants to launder money in this way will already find people for it with all the documents.
By transactions and betting history, I think that the casino can create a profile of the player and know if that person is laundering money, taking advantage of bonuses, or doing anything they shouldn't.