New Orleans, La.
Like Biloxi, only more so, New Orleans' recovery after Hurricane Katrina is a sight worth a special trip -- and there's gambling to be found, to boot.
While the city has only one major casino in city limits, you'll find slot machines absolutely everywhere [source: Frommer's]. Still, an even better way to gamble is on the water: A riverboat gambling cruise is a New Orleans must. Go around February to experience Mardi Gras, a party even Vegas can't match, or in April during Jazz Fest for an amazing line-up of musicians.
Any time of year, the kids will love the free ferry that carries tourists along the Mississippi River and the old streetcars that run through the most interesting parts of town. Or, just leave them at home -- what happens in New Orleans stays there, too.