"Private-equity firms have the ability to leverage both the real estate as well as the operating entities more so than publicly traded companies will be able to do," said Brian Gordon, a principal at Applied Analysis, a Las Vegas-based financial consulting firm.

Josh Lerner, a Harvard University investment-banking professor, said the growing interest in gaming companies stems from changes over the past decade in the way private equity firms handle their investments.

No longer are struggling companies, or turnarounds, private equity's only targets. Nor is private-equity firms' only reason for buying just a way to sell off companies' assets before taking the companies public again.

Although some jobs are still cut and smaller or underperforming assets are sold during takeovers, private-equity's business plans now include capital investment.

"They're buying companies with the intention of rolling up their sleeves and working with companies to improve their operations," Lerner said.

That could be what's happening with the second-largest gaming company, MGM Mirage.

Billionaire investor Kirk Kerkorian said Monday that his investment arm, Tracinda Corp., which owns 56 percent of MGM Mirage shares, was entering negotiations with the gaming giant to buy Bellagio and the CityCenter development.

Gaming analysts estimate the deal for the two Strip properties is worth $12 billion. Speculation about what would happen with MGM Mirage's remaining assets center on a possible company restructuring for sale to private-equity investors similar to what happened with competitor Harrah's Entertainment.

The $17.1 billion buyout offer for Harrah's from a joint-venture partnership between private-equity firms Texas Pacific Group and Apollo Management was approved by shareholders on April 5.

Judging by market value, a similar $90 per share offer for the current MGM Mirage structure would be in the $25.5 billion range.

Before Kerkorian's announcement, the company was trading at a market value of $17.9 billion.

And private equity's interest is not limited to deals involving big companies on the Strip.

Los Angeles-based real estate investment trust Colony Capital has a 75 percent equity share investment in the proposed $5.2 billion buyout of Station Casinos and a 60 percent ownership in the Las Vegas Hilton.

New York-based Whitehall Street Real Estate Funds, a Goldman, Sachs & Co. affiliate, owns the other 40 percent of the Hilton. It announced a $1.3 billion deal in April to acquire the parent company of the Stratosphere, both Arizona Charlie's casinos and a Laughlin casino.

Los Angeles-based Oaktree Capital Management owns 42 percent of Cannery Casino Resorts, which has a casino in North Las Vegas and a second under construction on Boulder Highway.

Private-equity investments are also involved in recent and possible deals including Planet Hollywood Resort, Sahara, Riviera and Hooters Hotel,

The pair involved in the Harrah's buyout, Texas Pacific Group and Apollo Management, are also rumored to be interested in slot machine manufacturer International Game Technology.

"They're converging on absolutely everything," said Dan Primack, editor at large at Thomson Financial. "There is not a major industry in the United States that private equity is not converging on."

Primack added that gaming is joining other traditionally nonprivate equity sectors including finance, energy, technology, and telecommunications.

The trend toward Sin City follows a sharp increase in nationwide private-equity mergers and acquisitions during the past three years, which has limited the availability of companies for purchase.

Private-equity buyout activity in the United States has increased from 835 deals worth $98 billion in 2004 to 1,265 deals worth $422 billion in 2006, Thomson Financial reports.

The buyout frenzy has continued for the first five months of 2007; private-equity activity is already at $281.7 billion for 496 deals.