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Casino chips are just proxies for cash and they exchange 1:1. They are not an "underground" currency at all.

Also you are (presumably) verified to be 18 (or 21?) years of age to gamble in a casino.

Yeah, but gambling is illegal in Japan.

To compare, in most casinos, the casino itself sells you the chips and buys them back. No need to fuss about location since it's all done in one place.

In the Pachinko system, you go into the "casino", spend money on a machine, win the "chips" yourself, then go to another "casino" nearby to sell the "chips" for actual cash.

Real casinos don't use legal fiction and owner stand-ins to separate the gambling part from the redeeming chip part into seemingly unrelated business.

In this case you get balls which are exchanged for a "prize". And then you go elsewhere to get money for it.

And goods and services. There are plenty of places in vegas that will accept chips as a form of payment.