Gambling is legal in most parts of the country and Vegas realized this. There was no need to go to Vegas to gamble when you could gamble in Atlantic City, New Orleans or even NYC
They realized if they were going to survive they would have to expand the business and offer things like shopping and shows. Atlantic City did not see this and the main focus was gambling and AC is dying while Vegas is thriving. Only about 60% of the income in Vegas is from Gambling
And finally there is a KOLLEL in Las Vegas from Chofetz Chaim, I am sure their rabbanim felt differently that you did and they are big talmidi Chachamin there