His take isn't new. It is deployed in part in the UK. Effectively, gambling companies adopt the role of the state conducting a full audit into your personal circumstances, income, assets, bank statement, utility bills to work out whether you can gamble.
I would hope that I don't need to explain why this isn't a good idea. But the one you may not have thought of: gambling companies love this because small companies are unable to audit, margins in the sector collapsed when activity moved online, that has stopped AND they are able to target customers who they don't want to deal with, before these rules it was difficult to identify customers who would take their money, now they have your passport, your address, your bank statements, they know where your money comes from (professional gamblers can still use beards but in the UK, students used to be very popular beards...that has stopped, regulators have also brought in rules to prevent beards being used as part of the changes above...the "neoliberal" US doesn't have rules anywhere close to this, it is complete madness).
There's a difference here between the concept and implementation though.
I agree, giving up that much information to a third party, opens too many risks for me, and I don't want it to be standard.
However, I'm sure there is some middle ground here that isn't so violating to your privacy. Like mentioned before, having a default limit that can only be surpassed if you're willing to go through some form of qualification. The limit can be set in place without any audit required, if its low enough.