Sin City is booming, even as the casino industry matures nationwide.

And Harrah's announcement that it is buying casino rival Caesars for more than $5 billion — a deal that would make it the nation's No. 1 casino company — is its bid to stake out a bigger piece of the action.

Although celebrity poker games draw ratings on TV, the nation's more traditional gambling industry is showing signs of advancing age.

Growth is slowing in the 11 states that allow gambling in traditional casinos or aboard riverboats. Gone are the heady days of 1999 when casino revenue growth averaged almost 21 percent. Last year, the growth rate was 1.9 percent, according to an analysis of American Gaming Association figures.

The second giant casino acquisition in less than a month underscores the determination of the nation's biggest gaming companies to buck the trend. Squeezed by fast-growing alternatives, from slot machine at racetracks to the spread of Indian casinos to the rise of online gaming, Harrah's joins a handful of other traditional casinos that are on the prowl.

Just last month, MGM Mirage bid $4.8 billion for the Mandalay Resort Group, which has some of the Strip's most luxurious properties.

At the heart of Harrah's deal for Caesars is a way to feed more of its customers into the market that matters most: Las Vegas. Though Harrah's reigns as the most profitable casino company, it only has one property on the Strip, gambling's mecca. But a tie-up with Caesars would change everything. If regulators approve the acquisition, Harrah's would pick up some of the Strip's swankest new resorts. And it would get to share in the city's renaissance.

Las Vegas' visitor counts are picking up this year after stagnating the past three years. And while casino operators are still seeing strong revenue gains, gambling's not the biggest driver of growth. It's everything else — rooms, food and drinks and entertainment.

"Vegas is just magic," says Jack Binion, a longtime casino operator in Las Vegas who sold the family's Horseshoe Gaming Holding to Harrah's earlier this month.

Cultivating gamblers

Harrah's strategy: Steer the middle-class gamblers who frequent its 28 casinos around the country into the big leagues of Caesars' Las Vegas resorts. Let the revenue flow like free drinks at the blackjack table at the top properties it picks up in the deal, such as the lush Caesars Palace, Bally's or Paris Las Vegas resorts on the Strip.

The strategy makes sense for Harrah's, which is known in the industry as the operator that has made the most out of loyalty programs aimed at cultivating its most generous bettors. Now it can offer them incentives to visit a whole new category of higher-end properties.

The deal "will afford the customers of both companies the widest range of resort destinations offered by any gaming operator," said Harrah's CEO Gary Loveman.

Both boards approved the deal, but it still needs the OK of stockholders. The proposed acquisition calls for Harrah's to pay $1.8 billion and hand over 66.3 million shares of stock. With the assumption of debt, the total value of the deal would be about $9.2 billion.

Graves says investors also worry that the combined company may have to sell assets to get regulators to approve the deal. They also are fretting about Pennsylvania's recent decision to allow slot machines, which could sap gamblers from Harrah's and Caesars casinos in Atlantic City.

Gambling on glamour

Harrah's gambit to boost its presence in Las Vegas is no surprise. In fact, many analysts speculated that Harrah's would buy casinos if regulators force MGM Mirage to sell off any properties as a condition for approving its buyout of Mandalay, says Ray Neidl, analyst for Blaylock & Partners.

Instead, Harrah's wanted to be the high roller.

"They became concerned with MGM and Mandalay and wanted greater mass," Neidl says.

Graves says the deal recognizes the power and allure of Vegas.

"There's a perception among gamblers that Las Vegas is still the foremost gaming market," Graves says. "If you are trying to build brands and do marketing based on big geographic reach, it's imperative to have a presence in Las Vegas."

The city — and the state of Nevada — is the kind of market that attracts growth in casino operations because of a favorable tax environment and fewer government restrictions, says Frank Fahrenkopf, the gaming association's CEO.

"We are seeing most of the major companies making their capital investments in proven markets," he says

Those "proven markets" are Las Vegas, Atlantic City and Tunica and Biloxi-Gulfport, Miss., according to Fahrenkopf. The latest capital investment, for instance, in Atlantic City is the Borgata Hotel, which opened last year and is partly owned by MGM.

It's not that Nevada hasn't seen gaming growth slip. Revenue grew only 2.4 percent last year, down from 11 percent in 1999, says the American Gaming Association.