A short time ago I had an experience that I did not like with a casino that I will not name for very obvious reasons, but when I asked for help with a problem that I had, they did not give it to me, they told me that I had to comply with the KYC so that the problem could be solved, the truth seemed to me an abuse, but each casino has its way of doing things and that is something that is respected, but it is not fair, it is a lot like exchanges, they force you to have the kyc and forced stuff is not very good.
I understand what you're saying but at the same time, it's up to the user to read the terms and conditions before signing up, or at least before making any deposits. If the terms of use do not specify anything, you are in theory within your good rights to refuse any Compliance or KYC measures, but there are only few websites that do not cover themselves with this.
Personally, when it comes to casino and betting, being KYC reassures me. If a casino doesn't ask me for any KYC, any verification or any justification, I will always have doubts about the real seriousness of the casino in question, always a fear that it will make an exit scam. It is like a big red flag for me.
Afterwards, in general, most regulators let you withdraw cryptos without KYC to get your funds back, isn't that the case for you?
The rare cases where they impose it (in most markets/regulations) to withdraw only cryptos, is when there is a suspicion of money laundering, terrorist financing, money dumping etc..
But overall, in most regulated markets, KYC is as much a security as a constraint for the end user, at least from my point of view.