For the casino, chips speed up the play of the game, add security to the game. Imagine a casino that played with banknotes, how much slower the games would be, plus you would have security issues if you had loose money in a table tray. You also have a better idea what is being wagered with chips just by looking at the stack, can't do that with a pile of banknotes. With chips you can determine the hold on the table much easier that you can with cash. Can you imagine a casino with a high limits game where the guest is betting $50,000 a hand or even higher, how do you verify that all the bills are there when the guest makes a bet - or if there a lower bills in the middle of the stack; the highest banknote in the US is $100 - so there would have to be 500 banknotes.