Looking for a new idea, he settled on the Las Vegas Strip, where he made a deal with landowner Kirk Kerkorian to develop a resort on 34 acres of his property. Sarno's partner Nate Jacobson handled the money side, while Sarno was the idea man.
In 1965, construction began on the hotel, which was based on the Palo Alto cabana and was scheduled to be called the Cabana Palace. Ultimately, Sarno decided that the idea of a Roman theme, signaling both ancient sophistication and decadence, with toga-clad cocktail waitresses and Roman architecture, would be too enticing for patrons to resist. Thus, the Cabana Palace became Caesars Palace. This idea of an extravagant theme on which to base a Las Vegas hotel and casino would be copied over and over again by casinos not only in Las Vegas, but in Atlantic City as well.
The design of Caesars Palace was considered nothing short of awesome to visiting gamblers at the time. Baroque Roman architecture framed the entrance, with spraying fountains and replicas of detailed Roman statues all around. Sarno wanted everyone who was a guest in his hotel to feel like a Caesar, which is why there is no apostrophe in Caesars Palace. It is a palace filled with Caesars, not the palace of one Caesar.
The hotel finally opened in 1966, with Andy Williams and Phil Richards as the opening entertainment acts. The hotel cost $25 million to build and open, a sum that was quickly made up by the success of the hotel. Sarno bought the property on which the hotel and casino was built for $5 million.
Caesars Palace experienced some notoriety when on the last day of 1967, famed stunt man Evel Knievel attempted to jump over Caesars' fountain and failed. Knievel was at the hotel to watch a boxing match and was entranced by the fountains. Knievel convinced Sarno to allow him to attempt the jump, which Knievel also convinced ABC to film.
Sadly, Knievel's attempt fell short. He hit the safety ramp, flew over his handlebars and went sailing into the Dunes parking lot, sustaining a concussion rendering him unconscious for a month. Ironically, the publicity from the event turned out to be a huge boon to Knievel and probably to Caesars as well.