It's not killing it, from around the world, there are still so many gamblers who are utilizing Bitcoin and other cryptocurrency for their daily gambling activities, while there are also many other players too that love playing with stable coins. If research is conducted on this, I am assuming that crypto gamblers will be much higher than the numbers of players using stable coins, the reason is because many people that preferred Fiat are using centralized local casinos to gamble but for the many of them using the only crypto casinos, they are betting with crypto.
Those stablecoins are also cryptocurrencies, which, if there is any survey conducted, will be associated with Bitcoin, and a total score will be given. The regulation of casinos I don't think it's as a result of stablecoins, but because crypto is getting more popular and it's also considered finance, so they can't stop but regulate it and get tax from the casino and also monitor their citizens' gambling activities.