Casino owner and operator Harrah's Entertainment (NYSE:HET) saw property earnings before interest, taxes, depreciation, and amortization (EBITDA) climb 6.2% to a record $301.1 million as revenues increased 4.5% to $1.13 billion. Meanwhile, adjusted earnings rose 6.8% to $0.79 per share. Growth in cross-market play and ongoing strength at the company's Las Vegas properties continued to drive results.

Continuing with the "Las Vegas is Hot" theme, Strip rival MGM Mirage (NYSE:MGG) reported even better results. The company posted net revenue growth of 10% to $1.07 billion, driven by a companywide 11% increase in REVPAR (revenue per available room) to $123. As a result, property EBITDA also jumped 25% to a record $384 million for an EBITDA margin of 36% -- the company's highest since MGM Grand acquired Mirage Resorts in 2000.

So just in case you've forgotten, the two companies behind the mega-merger ruckus on the Las Vegas Strip do, in fact, generate boatloads of cash.

I'm still a little stunned by all of this. Last month, when MGM Mirage and Mandalay Resort Group (NYSE:MBG) announced their $7.9 billion merger agreement (see The Logic of MGM-Mandalay), I recall hearing some talk that Harrah's may make a bid for Caesars Entertainment (NYSE:CZR) just to do them one better.

Back then, I thought that was the dumbest thing I'd ever heard.

I still do. Everywhere I look, the talk is about all the numbers that don't matter -- that Harrah's will have so many more casinos than anyone else, that Harrah's will have so many more slot machines than anyone else, and that Harrah's will have so many more employees than anyone else. And because of that, Harrah's can be No. 1!

Trust me: Harrah's management is not that stupid. And if you really think they are, you should have sold a long time ago.

I made it out to Vegas last week for the Ameristar Casinos (NASDAQ:ASCA) shareholder meeting (also a convenient excuse to research some of the neighborhood card rooms and make a quick road trip to Los Angeles) and got a chance to talk about the merger a little bit. And the rumor from those who would probably know suggests that it was in fact Caesars that initiated merger discussions.

That certainly makes sense. The only way Harrah's could have Caesars' key Strip assets -- the ones they wanted badly -- was to take on the whole mess.

Just look at how a Harrah's/Caesars union increases the impact of the 61,000 slots approved in Pennsylvania earlier this month (see The Magnitude of Pennsylvania's Slots). Combined, Harrah's and Caesars control half the Atlantic City market and stand to lose the most when the slots -- the ones from International Game Technology (NYSE:IGT), WMS Industries (NYSE:WMS), and Alliance Gaming (NYSE:AGI) -- are installed in Pennsylvania over the next few years. Basically, if Harrah's was losing on its own, it is now losing twice as badly when combined with Caesars.

And to make matters worse, the rule in Pennsylvania is one property per company. So now the combined Harrah's/Caesars only gets one shot total in Pennsylvania, rather than one each.

That is hardly an attractive set of circumstances. If Harrah's could have had its way, I'm certain it would have plucked a few key parts of its choosing, not swallow Caesars whole. I still think Harrah's jumped the gun (see No Quick Win in Casino Merger), but who's going to blame them?

Fool contributor Jeff Hwang owns shares of Ameristar Casinos and International Game Technology.