As we all know, casinos are always looking for means to get funds for the running and maintenance of their casino, so they can take advantage of every available means of securing funds, hence the majority of them do kyc because they know not every gambler would scale through their KYC process. They know that gamblers would definitely deposit and ply  and for those who  do not read ToS,  they are always  the victims of this act by casinos.  As for the $$$$ aspect of it, I believe the casino keeps it if the gambler does not meet the kyc condition spelled out by the ToS before registering with the casino. They keep  it for themselves and that is mostly where they get their excessive profit from.
This is why gamblers should propely take time to read ToS of casinos before registerring with them so that they would have knowledge before hand if they fit in for the requirements of the casino before registerimg or not. This ignorance of not reading ToS has caused a lot of issues with gamblers and casinos not releasing winnings and deposits as a result of failure by gamblers to fufill kyc requirements vefore hand,