People don't first decide which casino to go to, they decide to first go to Vegas and then decide which casino to go to. If Vegas's reputation is ruined, overal

People don't first decide which casino to go to, they decide to first go to Vegas and then decide which casino to go to. If Vegas's reputation is ruined, overall traffic to casinos in general would decline. If Vegas were to allow casino cheating (i.e. by refusing to regulate), if Casino A is revealed to have been cheating, then a player who plays and loses at (actually) honest casino B might have doubt (unreasonable as it may be) that their losses are legitimate. They may decide to make a fuss, complain, broadcast to their social networks that their losses were due to casino cheating. Even if casino B was actually honest, casino B now needs to constantly defends its reputation for fair play. At best, this represents an ongoing cost; at worst, casino B will lose all its traffic due to rumors that spin out of control. An honest reputation is indefensible in such an environment. The most profitable arrangement for all casinos involved is to prioritize long-term profits and cooperate with strong policing, such that Vegas as a whole (and thereby their casino individually as well) is publically perceived as offering fair odds.