What he did is not illegal but perhaps not very smart as the uncut sheets of currency that are for sale by the BEP cost (significantly) more than the face value of the actual money that you're getting.
The only reason USSS got involved to begin with is because the casino security officer was (rightly) suspicious of some guy in the casino ripping bills off a pad and feeding them into a slot machine...
I had to look up the Secret Service because I thought it was strange that the President's bodyguards would be interested in a suspected counterfeiter. Apparently their protection role was introduced after their primary mission, which is fighting financial crime. Weird.
Currency protection is one of the absolute most critical functions of a government, if people lose faith in your currency it causes a ridiculous number of problems.
When the US was young it's presidents didn't require the level of protection they require now (in fact a few of those presidents would have been as likely to shoot an attacker as not).
Eventually they realised that presidents do require protection but deciding who to use for that protection is quite a nuanced task, there are risks involved in having military protection or police protection (remember the political climate at the time was one of ongoing revolutions around the world and in Europe) so they needed an agency that existed, was extremely professional and likely wouldn't ruffle too many feathers.
I didn't get the impression he put them into a slot machine, it seems unlikely it would accept 2 dollar bills.
Also, I don't have a lot of casino security experience, but if a guy rips bills of a pad, it seems more likely he is joking around instead of counterfeiting. If you were counterfeiting currency you wouldn't want it on a pad, that's not very realistic at all.
The only reason USSS got involved to begin with is because the casino security officer was (rightly) suspicious of some guy in the casino ripping bills off a pad and feeding them into a slot machine...