I saw those issues with casinos that are untrustworthy. They really create issues for their winners to blockade the actual winnings.
But in most casinos, it's becoming a certain requirement if the winning amount is huge. They have it on their terms and conditions and you can't do anything with that if you're in that situation.
You have no option but just to comply. Because you just signed up for them and that's written on the rules that they can ask you that out of nowhere.
It is true that now it is almost a given that if you get a big win at any casino then you will have to go through KYC, however this is not entirely the fault of casinos, as we know governments are trying to put more restrictions on this market, and while you can avoid them if you use peer to peer services the moment you use a centralized service then you know that sooner or later you will be hit with a KYC request, I would like for things to be different but that is the reality we are facing now.
Yes, it is understandable that they're also required to do it when there's such money coming out from them and there could be relation to taxation if they're from the same country of operation. Needless to say, it's part of regulation and you being the owner of that money, you'll just have to silently follow what you've been asked.
It is the actual thing that's happening.
If you don't like that to happen, you'll have no idea when they will ask you for compliance. Thus, even for small wins or even just after your deposit, they could ask you KYC surprisingly.