Well, since I live in Japan I have some things to add. First of all online gambling isn't really illegal per se. There are always loopholes, otherwise many sites would put Japan on their banned regions list in the TOS. Big poker sites like pokerstars and GG also accept and advertise to players in and from Japan, that's no secret.
Over the years the law changed a bit and got more relaxed. I remember when I came here in 2009 for the first time, back then I informed betfair (worlds biggest betting exchange) that i will go to Japan. As a response they immediately suspended my account (of course they let me withdraw my funds). 7 years later they then accepted players living in Japan, after some law change.
SO yeah, I think the case OP mentioned is only so public because I bet that BIG, and also worked as an affiliate. They don't like people advertising gambling here. But hey, I guess a HUGE pachinko hall close to every bigger train station is no problem.

Thank you for the hands on input. On that last note, you can see clearly corrupt interests always making specific laws that put some things at an advantage over others. This is probably because a low of politicians or people close to them have profits from pachinko, but they can't demand some online casino from a far away country to give them money under the table.

If the law in our country forbids gambling, then we should be very careful in using a gambling platform that requires kyc, because the government can require for data at anytime form them, i want to believe that to an extent, we still have more other gambling platforms that don't require for kyc and they can be used, government will always threat on this for regulations until the casinos comply to their request and this may not be safe for us.
As said KYC does not accomplish anything. You can bypass it easily if you wanted to. The same way people gamble in illegal dens if there is a prohibition on gambling, it just does not work.