There never was a law and no-one says there was.

There is a reg which allows the casinos to make that rule internally if they wish. When the heat was on a lot of casinos chose to do so as the easy way out (especially those that had been fined for misdemeanours). Possible that gaming recommended that certain casinos did that but it was not a regulation.

The regulation that stipulates chips, checks and tokens must be 'for gaming purposes' can pretty much be interpreted however gaming and casinos like. Probably why it was worded so loosely.