"It's heating up between them," a source tells PEOPLE about the former Girls Next Door star and the Good Charlotte guitarist, who were first spotted together at a L.A. coffee shop in December.
The duo kicked off the holiday weekend together in Las Vegas, where Madden, 31, won a celebrity boxing match at the Hard Rock Hotel Saturday night. Madison, 30, and some pals showed their support by wearing a "Team Benji" shirts.
After the fight, the two headed over to club Wasted Space, where they avoided photographers and sat hand-in-hand in a VIP room for two hours. At one point in the night, Madden took to the club's stage and performed with Taintstick, a hard rock band he joined on the side last year, before leaving with club with Madison.
The night before, they dropped by the Palms' N9NE Steakhouse with Joel Madden after Madison performed in her burlesque revue, Peepshow, and continued their night at the Playboy club.
Reporting by MARK GRAY