You both highlighted the most interesting aspect and they were well expressed from your opinions, the use of stablecoin is not the same as the use of fiat, the only similarities they may have is that they both have the fiat USD value for their equivalencies, while fiat remains fiat and stablecoin a cryptocurrency, even as we all know its not volatile, we can choose form any crypto coin to gamble and there is nothing appearing to change from it.
As mentioned in the OP, it’s more about regulation and the freedom we used to enjoy when crypto casinos weren’t fully regulated which is no longer the case now.
We all know USDT still runs on blockchain, but the real attraction of crypto was never just the blockchain itself, it was decentralization, and that meant privacy. Sadly, we don’t have that anymore in most casinos because of KYC.