Image copyright Rockstar Games Image caption The Diamond Casino and Resort - where real cash can be spent on virtual vice

Grand Theft Auto V has opened an in-game casino where real money can be spent on gambling chips - but they cannot be converted back into cash.

The new feature was launched as regulators grapple with whether in-game wagers should be treated as gambling.

In GTA Online, players can buy in-game "dollars" with real currency, and then convert their virtual dollars to gambling chips.

The game is rated for ages 18 and over, but remains popular among young teens.

The in-game currency can be used to acquire cars, weapons, and cosmetic items - and used to play slot machines, roulette, or poker.

Some players reported that while they could walk around the casino area, the gambling tables were blocked in their country where gambling is illegal.

Gamers had mixed reactions to the discovery that gambling chips can be purchased with real cash.

Popular British streamer Broughy1322, who was showcasing the new content on Twitch said: "They've done it, I can't believe they've done it," after finding that in-game dollars can be exchanged directly for chips.

"They've gone over the line of what they would, and it's a big problem that they allow you to buy chips with real money, frankly," he added later as viewers debated the system.

Ahead of the launch, it was not clear if such an exchange would be possible.

Gaming news site Kotaku speculated that chips would only be earned by playing the game - similar to the way it works in Rockstar's other recent online game, Red Dead, and in many other games. "This way, players can't spend real money or win fake money that is worth real cash in the casino," it wrote.

Chips can be spent on blackjack, poker, slot machines, video horse racing, roulette, or spent on furnishing a casino penthouse with a wide array of customisable items.

Image copyright Rockstar Games Image caption Put it all on black: players can gamble their in-game dollars at the tables

Others gamers were excited by the update, which has been hinted at for about six years - and also contains an array of missions, story scenes, and new vehicles centred around the casino resort.

The online mode was launched as an add-on to the popular game in 2013, and has always allowed players to top-up their in-game wallets with real money.

The conversion rate in 2019 is roughly GTA$500,000 for £5.99 - with discounts for higher amounts purchased. There is also a limit on how many chips can be bought every hour in the new casino.

But the fact that in-game gambling winnings cannot easily be converted back into real-world cash may be a key distinction for regulators.

The UK gambling watchdog told MPs on Monday that it does not oversee the purchase of in-game content - like video game loot boxes - because there is no official way to monetise the winnings.

A prize has to be either money or have monetary value in order for it to fall under gambling legislation, it told a parliamentary committee.

However, a grey area exists in some games where a third-party "black market" operates, allowing players to gamble or sell the in-game items they win. Some examples include players earned through "card packs" in Fifa 19, or rare skins earned in shooter Counter-Strike.

GTA items, meanwhile, are tied to a player's account, making it more difficult to sell than in some other games.

Rockstar has been contacted for comment.