From what I understand when a casino does KYC it's usually for liability reasons if they get a deposit that's either very large or a deposit from a shady source address such as stolen coins, hacked coins, MtGox coins, etc.
This happened in the past already a few times and many scam accusations were started basically someone deposits like 10 BTC makes 1 roll and then tries to withdraw. In this scenario it seems like a sketchy withdraw so they will have to ask for KYC.
Thank you for the post. I read your scenario but am concerned a casino would ask for KYC in that situation.
For example, if the local police, legal authority or casino licence issuer requests those funds to be frozen until KYC is completed (because of a spot random check or as a result of other investigations) then that is definitely acceptable but if they casino operators are playing the KYC game to freeze funds and force customers in to sending ID just because they hold customer funds then it is not acceptable at all.
If somebody deposits 10 BTC then withdraws it after making one, two, three or zero rolls of a dice then what right does the casino have to ask for ID? If the casino is registered in a country and has a licence issued by an authority that imposes a KYC/AML policy then fine no problem, the casino website must state that policy clearly.
In the case of the scammers at Betking, its owner operator Dean Nolan registered the company in Costa Rica where a licence is not needed for gambling.
Stake and Primedice are registered in Curacao and each has its own gambling licence from there.
Cloudbet is registered in Montenegro and has a gambling licence from there.
No matter what amount you deposit, withdraw or win in online casinos there is NO requirement for KYC/AML unless the legal authority of the country your casino is based in asks you to freeze that customers account.
If an online casino asks you for KYC/AML then they are effectively lying behind the facade of "we have an internal system for detection that request KYC". Why would they lie? Well probably with the obvious ultimate goal to steal customer funds.