Here is a Knights of Columbus chip from Arizona to compare the symbols.

Also, a search of the California State Knights of Columbus website shows that this year is the 110th annual
State Convention. Your chips appear to commemorate the 56th convention which would've been held in
1958. I'd like to think that that is pretty conclusive evidence.

Why Dunes? No idea. I wouldn't think that the convention would be held out of state. Maybe they
had some type of Casino night theme.