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.
I think casino are forced to do KYC in order to make themselves compliant otherwise the authorities may force them to shut their business as it has the risk of people doing money laundering using their platform.
Another thing is the if casino do not have KYC implementation, then kids, minor and underage will also access the site and gamble. This is definitely not good for the society in general. If there is any way that minors are not allowed to gamble and money laundering can be stooped without KYC, then we all will be willing to accept such solution but until then, KYC will remain mandatory.
Regarding the issue of money laundering, yes, it is possible but I think it is unlikely, or what I mean is that one of the reasons casinos implement KYC is that it is more aimed at restricting users in the sense that underage children cannot be involved in gambling.
But yes, this issue should be the center of attention, and in fact lately I have seen quite a lot of new casinos that do not implement KYC at all which is why I am sure that the goal of these casinos is that they want to get more customers, because it is certainly very possible for children - children who are still underage can then fall into and get involved in games easily, therefore I think the real solution to the problem must be that we ourselves protect and limit a child's activities, because now gambling is increasingly easy to reach, especially as stated I said that now many new casinos are emerging that do not implement any KYC system.