As long as players lose, the info from the security program will not be used and everything is fine. But if a player wins, the information from the security program suddenly is very important and KYC has to be enforced!
You are pretty much describing every online casino in existance. Show me one casino which bans a player who resides in a country like USA or uses VPN to avoid these bans instantly.
All do the same thing. This KYC crap is just being used as a weapon against the players. Nobody gives a crap about where you live or where you got the funds from. All that matters is the profit for the casino.