This week, while moving to block a merger between U.S. Airways and American Airlines, the federal government was also trust-busting another industry: casinos. Pinnacle Entertainment has been trying to buy rival Ameristar for $2.8 billion, but the Federal Trade Commission worried that would create a monopoly in St. Louis, so it required Pinnacle to sell off a couple of its properties before closing the deal.

Screen Shot 2013-08-15 at 3.24.23 PM The casino hotel industry: Not doing so hot. (IbisWorld)

It's unusual for the FTC to mess with the gambling industry. The agency has intervened in only one casino merger in recent years -- Penn National's acquisition of Argosy Gaming in 2005. Aside from the occasional casino sale here and there, there's not much consolidation going on, unlike in the supermarket and weight loss businesses. It gets even stranger when you consider that the industry has just weathered the kind of rough spell that usually prompts companies to band together for strength.

So, what gives? A few things.

- The consolidation wave already crested: After a period of rapid expansion in the 1990s, the 2000s saw more restructuring and some de-fragmentation: Harrah's bought Caesar's and MGM bought the Mandalay Bay, both in 2005. There's been little interest since.

- Big dogs don't want small fry: For gigantic casinos in major gambling centers, like Las Vegas and Atlantic City, buying smaller outfits doesn't fit their brands or business models of building super-luxury showpieces. "The Wynns, the Las Vegas Sands -- what it takes to move their needle economically don't get served by casinos in Iowa or Cincinnati," says casino industry consultant Steve Rittvo.

- A big piece of the industry is off limits: Many states still only allow Indian tribes to operate casinos, and they're already oligopolies. Private companies can sign management contracts with tribal casinos but can't buy them.

- Local markets are carefully regulated: States that allow gaming have set numbers of licenses, so it's difficult to start new casinos. And mid-tier companies with the financial wherewithal to buy whole casinos, like Penn National Gaming, are already in most local markets. But the FTC only looks within a defined geographic area to determine competitive harm, and there's a high bar, since -- according to its complaint against Pinnacle's merger -- bigger casinos with more data are better able to target individual gamblers with offers tailored to their habits. "You've got to be real selective when you do a consolidation," Rittvo says. "Are you going to run into more problems than Pinnacle had?

- There aren't many returns to scale: Unlike in the airline industry, most individual casinos are actually very separate businesses, not subject to the positive network effects of having a wide range of routes. And Rittvo says that the main way that casinos leverage their size -- rewards programs that keep guests coming back -- can be achieved through partnerships with other companies. For example, the MGM Grand could do a deal with Maryland Live! casino so guests rack up rewards points eating buffets at Arundel Mills that they can then spend in Vegas, and the two companies split the marginal profits.

That's not true, though, for businesses that support the casino industry. Companies that make gambling machines have merged rapidly in recent years, and are now able to produce more rapidly at lower cost.

Will the industry ever start consolidating again? Two big questions:

- New states: With the exception of a few remaining opportunities in places like New York, the U.S. terrestrial casino market is pretty much saturated -- which means lenders don't see the point in helping casinos consolidate. "The U.S. market is getting to the point where it's robbing Peter to pay Paul," says Mark Nichols of the University of Reno's Institute for the Study of Gambling and Commercial Gaming. "From the bank's perspective, it's 'if you merge, then you're just taking money from yourself.'" Everything could change, though, if Texas, Georgia, South Carolina and Tennessee allowed expanded gambling. Then, the biggest players would be best positioned to bid on new locations.

- The Internet: More states are legalizing online gambling, but they require an entity to own a land-based casino to get into the business. Now, unrelated companies are shopping around for cheap casinos to buy just for a crack at people playing in cyberspace, which would tend to further fragment the terrestrial market. If online gambling is ever legalized nationally, that market is wide open: Everyone from the Hard Rock Cafe to American Express could get a chunk of it, since the barriers to entry are low. And the European experience to date suggests that while a few big players might leverage their name recognition into market share, mid-sized sites can create partnerships that provide players with enough depth and variety to keep them coming back.