JEFFERSON CITY - The casino industry and gambling opponents are considering joining forces so that each side can get something it wants out of the Legislature.

The state's biggest casino operator, Ameristar Casinos Inc., met recently in Kansas City with Peter Herschend, co-owner of Silver Dollar City in Branson, Mo. Herschend is a prominent Republican and ardent gambling foe.

Herschend said the proposed compromise involved repealing the state's $500 loss limit in return for confining gambling to the regions that already have it - 11 locations along the Mississippi and Missouri rivers. He would cap the number of licenses at 12, which would leave room for a new casino proposed for St. Louis County.

"If I could, I would wave my magic wand and gambling would go away," Herschend said. "But it isn't going to happen. So, those of us who believe that gambling needs to be controlled set about trying to find the best combination we could."

Troy Stremming, vice president of governmental affairs for Ameristar, said discussion centered on capping the number of licenses in Missouri and the number of slot machines at each casino. Illinois has such limits. The maximum there is 10 licenses and 1,200 "gaming positions" per casino.

In Missouri, the package also could include a modest tax increase to raise money for public schools, Stremming said. But in return, casinos want to finally get rid of the state's $500 loss limit.

"Maybe in a perfect world there is a way we all can give a little bit to accomplish goals of people who are at opposite ends of the spectrum," he said. Ameristar operates casinos in St. Charles and Kansas City.

Limiting the number of licenses could make it harder for a casino to be built near Branson in Rockaway Beach, Mo. Rockaway Beach is circulating petitions to change the constitution to permit a casino there, on Lake Taneycomo. The issue could be on the statewide ballot in November.

Herschend opposes that casino but said it didn't spur his attempt at compromise. "My objective is not Rockaway Beach. My objective is to say, 'We have enough'" casinos, he said.

Republicans control both the House and Senate. Most are reluctant to lift the loss limit, the last remnant of rules approved by state voters when casino gambling was legalized in 1992. Still, some legislators said they were intrigued by the proposed compromise.

Sen. Doyle Childers, R-Reeds Spring, believes gambling spurs numerous social problems and results in a net cost to the state. He likes the loss limit "because at least it keeps the gambling a little lower key."

But if loss limit repeal were linked to tight controls on expansion, "I'd be hard-pressed not to support it," Childers said. He would add a requirement for a countywide vote on new casinos, so that a small town such as Rockaway Beach couldn't make such a big decision on its own.

Casino Watch, the main anti-gambling lobbying group, strongly opposes repealing the loss limit. Mark Andrews, the group's chairman, said repealing the lid could prompt Missourians to lose $300 million more each year, on top of the $1.3 billion they already leave behind.

"States cannot gamble themselves rich," Andrews said. "That's 100 percent off the table."

Removing the loss limit also would make it easier for criminals to launder drug money, Andrews said. Currently, Missouri gamblers can buy no more than $500 in table-game chips or slot machine tokens during each two-hour gambling session. Prosecutors have said that discourages money-laundering.

Andrews did like one facet of the Herschend/Ameristar concept: limiting the number of slot machines.

Casinos have steadily expanded the number of slots. There are now 18,155 "electronic gaming devices" in the state's 11 casinos. Instead of tokens, most players use electronic credits, which speed up play.

The number of table games has dwindled to 476 statewide. A whopping 87 percent of casinos' revenue comes from slots.

Andrews would like to see the number of slot machines reduced. Stremming, the Ameristar official, said he would oppose a reduction in slot machines but is willing to consider capping the devices at their current level.

Both sides said the talks were in the early stages and no bill had been drafted. But in return for repealing loss limits, Ameristar and some other casinos have generally supported a 2 percentage point increase in the tax that casinos pay on their adjusted gross receipts.

Gov. Bob Holden has proposed that tax increase, which he says would generate about $33 million a year. Removing the loss limit would bring in an additional $53 million, because when gamblers lose more, the state collects more in casino taxes.

All the money would go to public schools. Herschend is a member of the State Board of Education but said he was not making the proposal on behalf of that board.

The governor's spokeswoman, Mary Still, said she was unfamiliar with the negotiations between Republicans and the casinos. But she said: "It makes sense. It seems like a practical approach."

Herschend said some Republican legislators who ran on anti-tax platforms were cool to the plan. "I don't think this is a cakewalk for this concept," he said. "What I'm trying to do is say, the first step in controlling a flood is to build a levee. That's the concept of the great wall" around gambling.

Herschend said that in addition to Ameristar, he had discussed the potential compromise with Harrah's, which operates casinos in Maryland Heights and Kansas City. Harrah's declined to comment.