Wait, I don't get the last bit. Did he go to the casino, exchange $40k in cash for chips, not gamble at all with them, and then take the chips to the cashier to get it changed back to cash?

That's... weird? I feel like as a casino it'd not be unreasonable to think something fishy was going on, like the guy was making a (somewhat clumsy?) attempt to launder money.

But overall... yeah. Certainly a casino has the right to refuse service to whomever they want -- such as someone who's counting cards (not that counting works at blackjack these days, since no casino deals out a single full deck at a time anymore) -- but the idea that they don't feel they have to honor whatever payouts owed up to the point of kicking someone out... messed up.