After years of steady expansion in their legal niche, lawyers who represent casinos and other gambling interests say there are signs their specialty may be leveling off, even as casinos in Pennsylvania are booming.

For now, there appears to be plenty of work for lawyers in this highly specialized, insular field, particularly in jurisdictions such as Pennsylvania, where legalized gambling still is new and revenue is on a sharp upward arc.

But gambling revenues are down nationally, and among those who practice gaming law, the talk invariably is about whether gambling has reached a saturation point.

"Is business down in Vegas?" asks Hersh Kozlov, head of the gaming practice at Duane Morris L.L.P. and one of the nation's most active gaming-industry lawyers. "Yeah, sure, business is down everywhere.

"I don't know when the economy gets better. I don't know when the saturation point arrives. I do know that if I am standing at the corner of Broad and Market in Philadelphia, I have 18 places within an hour-and-a-half drive [to go to gamble]."

The American Gaming Association, the Washington, D.C.-based trade association that represents gambling interests in the United States, says casino revenue nationally peaked at $34 billion in 2007, just as the recession was beginning. It dropped to just under $31 billion last year.

Revenues in New Jersey, where gambling was legalized in 1976, were down 13.3 percent last year to $3.9 billion, although they are up dramatically in Pennsylvania, where casinos had a record July, taking in $211 million, much of it at the expense of Atlantic City.

"We are in uncertain times, unlike in the past few years when you saw steady growth," said Gabe Galanda, a gambling lawyer based in Seattle who focuses on Indian casinos and chairs the American Bar Association committee on gaming law. "The overarching question is: Is the market saturated?"

One of the ironies for gaming lawyers is that the same recessionary pressures complicating life for the casino industry also are spurring state governments to legalize gambling to plug holes in their budgets.

That, in turn, is creating work for lawyers who advise legislators and regulators in states that are in the process of enacting gaming laws on how to regulate the industry and draft legislation.

"We are extremely busy; I tend to go from one matter to another," said Nicholas Casiello Jr., the head of the gaming practice at Philadelphia's Fox Rothschild L.L.P. "I do think that as we reach the point of saturation, all these casino companies are going to be more cost-sensitive, and therefore they will be like any other industry, spending less money on outside counsel."

I. Nelson Rose, a professor at Whittier Law School in California and a nationally recognized expert on gaming law, argues the industry has a long way to go before it reaches the point of saturation, either here or abroad.

But he says another dynamic at work may put pressure on legal fees: The industry has consolidated, lessening the need for outside counsel in some instances. Moreover, jurisdictions with a mature industry, such as New Jersey, are going to have fewer unsettled legal issues.

In the Northeast, Maryland has new casinos coming on line and Massachusetts appears set to sign off on establishing casinos.

Gambling also is booming overseas. Casiello recently worked with a client and government officials in Jamaica on gaming legislation there. Other firms, including Center City's Blank Rome L.L.P., want to do business in Macao, the former Portugese colony off the coast of China that has become an Asian gambling hotspot.

Blank Rome lawyers advised a casino company in Macao in 2007 on a $150 million deal to set up ferry service between Hong Kong and Macao, opening a huge potential market.

If there is a downturn in law-firm gambling revenue, it won't be as dramatic as the fall-off in real estate or leveraged buyouts in 2008 and last year.

That is because the practice area is relatively small. Mega-firms such as Dechert L.L.P. or Morgan Lewis & Bockius L.L.P. typically do little in the arena because there simply isn't the scale to sustain a large law firm with legions of lawyers typically assigned to major cases. Rose estimates there are probably about 1,000 lawyers in the country who do gambling law, including in government and the private sector.

They tend to be specialists. Many in this region, like Kozlov, got their start in the early 1980s in Atlantic City and branched out from there.

Some, like Kozlov and Lloyd Levenson, a casino lawyer based in Atlantic City, are former prosecutors who were snapped up early on by the gambling industry in New Jersey, then eager to prove to regulators it would be operated cleanly.

Levenson won a name for himself in the early 1980s as a prosecutor going after members of the Pagan motorcyle gang in Atlantic County. That early experience won him local notice, and an entree with casino executives.

His 75-lawyer firm, Cooper Levenson, has gambling-industry clients around the country. Like other lawyers here with many years representing casinos in Atlantic City, Levenson has found the experience transferrable to other jurisdictions. And because the field is so highly specialized, it's hard for new lawyers to crack.

"If I closed my eyes 20 years ago and opened them now, I would probably see the same group . . . working in the same jobs, but in different parts of the world," Levenson said.

Contact staff writer Chris Mondics at 215-854-5957 or cmondics@phillynews.com.