Casino and money laundering

I heard that casinos are used for money laundering. Here is my guess on how it works.

The customer brings "dirty" money, e.g. obtained through corrupt or illegal means, to the casino and converts them to non-negotiable chips. When the customer uses the chips to bet. When the customer wins a bet, the customer is paid with negotiable chips. The customer can convert the negotiable chips back to cash and is given a receipt by the casino. The customer can report that his wealth comes from winning at the casino. He does not have to report the money that is brought in for the gambling.

Is this how it works?

Read this article on money laundering. There is a mention about betting in a casino.