Last week, fellow Fool Nathan Slaughter gave the optimistic view of riverboat casino operator Isle of Capri (NASDAQ:ISLE). That is, you have to spend money to make money. The stock also happens to be on the cheaper end of the casino operator scale, and there was even an analyst upgrade today.

But here's the question that should be asked: Why should the average investor even bother?

I don't think he should. Prudent, Foolish (with a capital F) investing always boils down to one of two things: (1) Buying a great company at a good if not great price or (2) Buying good companies at a great price. Isle of Capri simply doesn't apply, in my opinion.

Last Friday, Nathan pointed to Isle of Capri spending money to help it compete in key markets -- namely Lake Charles, La.; Biloxi, Miss.; and Black Hawk, Colo. -- as a factor for reduced company revenues and earnings in the first quarter as well as areas for future growth. However, these are the types of situations where the company is least prominent -- the ones where it faces real competition.

We discussed these competitive deficiencies back in March, when the company promised $1 billion in revenues over five years in winning its bid for a gaming license in Chicago (a bid that is being contested).

The company's second-highest grossing property is in the Shreveport-Bossier City, La., market, where the property is a fairly distant fourth place to Harrah's Entertainment's (NYSE:HET) recently acquired Horseshoe (see Harrah's Gains, Gamers Lose), Boyd Gaming's (NYSE:BYD) Sam's Town (just acquired from Harrah's), and Penn National's (NASDAQ:PENN) debt-ridden Hollywood Shreveport. In Kansas City, Isle of Capri has by far the least competitive offering, behind leaders Ameristar Casinos (NASDAQ:ASCA), Harrah's, and Argosy Gaming (NYSE:AGY) -- all of which have put or are putting significant capital into improving their offerings.

Even the company's property in Vicksburg, Miss., reported weaker results in the second quarter, despite Harrah's Entertainment leaving that market at the end of last year. In that market, Ameristar (which I do think is a buy -- see Sizing Up Ameristar) has dominated with a larger offering in a superior location, just off the highway -- you must pass Ameristar to get to Isle of Capri.

With that kind of competitive record, you have to be concerned about how the company's lead property in Lake Charles, La., will fare when Pinnacle Entertainment arrives with its new property. Isle of Capri's third-highest revenue producer is its Black Hawk property, with which Ameristar will compete as early as the beginning of next year (see Ameristar's Land Grab).

Isle of Capri's real saving graces are its casinos in niche markets where there's no competition. The company has three casinos in Iowa that all reported higher revenues and improving margins, altogether accounting for 19% of revenues. The company has had similar success in Lula, Miss. (though revenue comps actually fell), and at its small property in Boonville, Mo., about an hour east of Kansas City.

I'm not saying that Isle of Capri is an awful company. It isn't. However, there's neither anything particularly brilliant about it, nor is the stock so cheap that I'd begin to salivate.

Fool contributor Jeff Hwang owns shares of Ameristar Casinos.