I think I have to agree with you on this too because of the recent incident that a member on this forum talked about. It was about a kidnapper that abducted some and ask for ransom which was demanded to be paid into his gambling account and because he had actually done KYC on the casino, he information was exposed. Such is a good thing that the casino helped out because they complied with government policy.
It is really a risky things when someone complete kyc verification on any casino site. because when you will play casino game and win a big amount then no one will able to track you . but when you complete kyc verification then casino company has your personal documents. so then if you win a big amount and withdraw your money and if that casino site is not reputable then they can hire any kidnaper for attack you and take bake there money in a hidden way.
Everything has two sides, advantages and disadvantages. Just like in the story Dr.Bitcoin_Strange provided: if the kidnapper does not verify his identity with the casino, it will be very difficult to find and catch him. Not to mention, these are just small-scale kidnapping and ransom cases. If criminals take advantage of this loophole to launder money or finance terrorism, the problem will become more serious.
By the way, if the casino is not reputable, can they let you win or can you withdraw large amounts without any problems? Basically, if the casino is not reputable, I think you will not be able to withdraw such a large amount of money. because assault, kidnapping and extortion are serious crimes, i don't think casinos are stupid enough to choose that course of action instead they will try to prevent you from withdrawing money from their casino.