...Is it fiat payment methods? Is it that casinos holding users money? — these two are top of my head, you tell me more.
So, why not remove whatever those things are that makes casinos necessary to be regulated? Meaning — stick to crypto deposits, don't hold users funds (i.e, become non-custodial).
I think the casino as a whole needs to be regulated for so many reasons. It's not yet possible to create a system that can regulate itself, run the algorithm, verify users, monitor accounts and withdrawals for supposed money laundering and suspicious criminal activities. You'll need a live data to process all of those things and it's not just possible without human intervention. Plus, the government needs to keep an eye on everything that revolves around a revenue generator like casinos, so nope.
Does that get rid of casinos requiring to be regulated am I being ignorant about scheme of things?
casinos are fully regulated, but we have all type of cyber crimes and hack cases recorded from years past till date, how much more if they weren't. Control is the key word there, and the governs can't just ignore it.