By Shawn Tully

(FORTUNE Magazine) – LAS VEGAS IS ALL ABOUT swank playgrounds for high rollers, right? You'd think so, judging by the April unveiling of gaming czar Steve Wynn's $2.7 billion Wynn Las Vegas, which boasts a Ferrari showroom, a Daniel Boulud eatery that runs $500 for two, and marble-rich rooms at over $300 a night. But one entrepreneur is mining gambling gold by going downmarket. Nick Ribis, a former lawyer who once ran Donald Trump's empire, is acquiring down-at-the-heels venues the Wynns of the world don't want, shunning high rollers for slots-and-burger conventioneers. With that formula, Ribis can charge room rates half or a third of Wynn's or the Bellagio's and still mint money. "The competition in Nick's market is getting weaker while the top end gets stronger," says his ex-boss, Trump.

In just three years Ribis has built privately held Resorts International Holdings into the fifth-largest gaming company in America, cobbling together an array of aging, once-golden names. Ribis's Italian immigrant parents taught him to be tightfisted, but it was the Donald who introduced him to dealmaking. As a kid in the New Jersey suburbs, Ribis rose before dawn to count the empty soda bottles at the family deli "so the suppliers couldn't cheat my mom on the deposits." When Trump faced bankruptcy in 1989, he turned to the team of Ribis and Steve Bollenbach, now CEO of Hilton Hotels, to fend off the banks and bondholders. Ribis helped persuade creditors to let Trump keep his trophy holding: his casinos. It was the gaming company's IPO in 1995, orchestrated by Ribis, that restored Trump's wealth.

In mid-2000 Ribis joined Colony Capital, a $6 billion private-equity fund run by renowned real estate investor Tom Barrack. The pair correctly bet on an Atlantic City renaissance by buying the fading Resorts Casino for $140 million. But Ribis played his best hand in Las Vegas, where last year Colony bought the Las Vegas Hilton for just $280 million. "I paid $90,000 per room, and Wynn's rooms cost $1 million!" raves Ribis. "If I charge $130 a night I make tons of money! He has to get over $300!"

Ribis and Barrack are also feasting from the merger wave. When Harrah's announced its acquisition of Caesars last year, Ribis knew that the two companies would have to divest casinos to avoid violating antitrust laws--and knew they would rather sell to him than to larger, more threatening competitors. So this year Colony paid $1.2 billion for the Atlantic City Hilton as well as riverboats in Mississippi and Indiana, giving Resorts a presence in all four of America's biggest gaming venues. Resorts' free cash flow, after interest and taxes, is currently running at $140 million, on an equity investment of less than $600 million. Other gaming moguls may have their signatures carved in glass and granite, but don't be surprised if it's the worker bees like Ribis who pocket the big profits. -- Shawn Tully