I don't think they can do that; they should've been able to cash you out. Problems in the casino would've been resolved at the table (if there's foul play or cheating involved), but when you are in the cashier already to exchange it, it should've been done already.

Maybe it's too much? $25k at a time? I hope they have managed to speak with the supervisors or someone else. Perhaps it's within the limited range or something and maybe there are AML type of stuff as well.