I agree with what you said. Even if we are using offshore online casinos, we still need to check if the security is tight. We are giving away delicate information during KYC, so we need to know if they are being kept private or if they are just selling all the information to scammers.
How can we know if a gambling site is selling our information to another party? That will be very difficult to know. This is one of the reasons I liked crypto gambling sites.m but most of them are not making KYC compulsory.
Sure, local online casinos are truly secure because of regulation, but it's actually more difficult to win against the house. Why? They are paying taxes and all kinds of fees just to keep their business going, so they will probably get it back by making the gamblers lose more.
Local casinos are fiat casinos but some people may prefer to just gamble with cryptocurrencies.