Mayor Ray Nagin on Friday proposed Las Vegas-style gambling in the city's larger hotels as a way to revitalize New Orleans' shattered economy after Hurricane Katrina (search).

"Now is the time for us to think out of the box. Now is the time for some bold leadership, some decisive leadership," he said.

The plan — which would need the approval of the Louisiana Legislature — calls for a large-scale gambling district along Canal Street. Nagin said gambling should be allowed in hotels that have more than 500 rooms.

Video gambling machines are already allowed in roughly half of Louisiana's 64 parishes, but there is only one full-scale casino in New Orleans. The downtown casino, operated by Harrah's, has been closed since shortly before Katrina hit, and the company has not given a timetable for a reopening.

Also, three dockside riverboat casinos (search) operate in the New Orleans area.

Nagin raised his proposal after Katrina virtually destroyed all 13 dockside casinos on the nearby Mississippi Gulf Coast. Mississippi lawmakers have passed a bill allowing the casino operators to rebuild on dry land.