Gambling may be a sucker's game, but these days, gambling stocks have made pretty good bets. Mandalay Resort Group
Peers followed suit, with Isle of Capri Casinos
Mandalay's profit prediction of over $1.10 per share blows away analysts' estimates of $0.84 per share and would soundly beat the $0.69 per share that the firm inked in last year's first quarter.
Must be good to be the folks with the key to all those slot machines, eh? Well, maybe -- Mandalay's slot revenues are up 30% -- but it turns out that's not the real source of the firm's growing stash of green. Fool casino ace Jeff Hwang recently penned an interesting article that reminded us that the big bucks for casino and resort operators don't always come from the gaming floor. Often, the payoff can be found in the casino's hotel properties.
Mandalay appears to be the shining example of this, as revenue per room at its flagship hotel has advanced at a double-digit rate. Much of this comes on Las Vegas' increasing strength in the convention business, as the desert strip continues to draw business away from other convention centers.
The resort industry and gaming industry look well-positioned to capitalize on an improving economy and an expected travel rebound. But Fools should remember to take a look at the individual merits of the companies, and not bet on an entire industry. W.D. Crotty's recent look at Trump Hotels
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