I don`t think that it is a problem to KYC. Nowadays everybody can find your private data - every day we hear how our data was hacked, every week i get at least one call from the cheaters, etc. Of course it doesn`t mean, that we can show our id to everybody without research. The problem is that KYC is used as official cheat from casino.
Such decision as we are talking about - KYC before the first deposit, will defend gamblers, but casino don`t want to use it.
That is true, and it's the risk of submitting a KYC documents to verify your account. However, it's not new as even banks and other financial institutions requires you to follow the KYC protocol. Hacking is possible, but it's less likely to happen if the site you are trusting has a strong security, so to ensure that they have, check on their reputation and their popularity, if they have both what are you looking for, then trust them, but never think it's guaranteed that your account and documents are safe, or hack-free.
Ultimately, everything must comply with regulations. The final decision is our own choice. If you want to play anonymously, you can look for a casino that doesn't ask for KYC. if we don't have problems with KYC, we can use many casino choices.
IMO, I don't trust them, unless they are decentralized, but if they aren't they are still required to follow the law as operating illegally may put them at risk and our money as well, so it's a no go.
KYC issues are requested when we get a big win and want to make a withdrawal. however, the casino carries out the procedure. it isn't very pleasant, but that's the procedure they apply. Just follow it, if there are no problems, your withdrawal will be processed.