On the ships we been on, RCCL and Celebrity, they didn't give me chips when I got cash at the casino, they just gave me the cash. The slot machines don't take chips, they take quarters, nickels or paper money.
It's nice that it's not considered a cash advance. You won't need cash on the ship except for the casino and maybe staff tips if you don't put them on your SeaPass. We take travelers' checks and cash them for use as tour guide tips and at the casino., but sometimes I just put the casino cash on the pass.