That's why casino doesn't want to removed KYC for their members because KYC can help casino to check their member's background so they will not worry with anything especially if there are an audit comes from the government. [..]
It's not them but the government that requires the implementation of KYC. If there was no mandate by the government requiring it, they wouldn't mind accepting gamblers on their platform even without KYC, as that would be easier for them and they could easily attract gamblers. However, as the AMLC is strict in doing its job, they want to prevent or minimize money laundering by criminals, and KYC is just a basic implementation they need in order to trace the transaction's owner and its origin, of course.
Yes, that is the basics of it. Money laundering is well known to be done in casinos and other gambling places and online gambling sites cannot get away from that too. It's the easiest way to wash the money without even spending too much. I think the wagering requirement does help a lot too. Even if there's no KYC as long as one gambling site is strict with the rules about the wagering requirements, syndicates who are trying to wash the money will not go in it because it will take time before they reach a large amount of wager before they can withdraw the money. Money laundering won't do small amounts so they will be risking a lot of money to gamble before they can even withdraw.