With the recent consolidation in the gaming industry that will leave Harrah's Entertainment (NYSE:HET), MGM Mirage (NYSE:MGG), and Penn National Gaming (NASDAQ:PENN) as the three largest casino operators in the country, it's natural to start throwing names around about who might be next, regardless of whether the proposed combinations actually make any sense. The short list of who's left includes riverboat casino operators Ameristar Casinos (NASDAQ:ASCA), Aztar (NYSE:AZR), Isle of Capri (NASDAQ:ISLE), and Pinnacle Entertainment (NYSE:PNK).

Today, we're going to talk about Isle of Capri, which reported earnings last Thursday. For the second quarter, the company posted almost perfectly flat revenues of $269.7 million, while EBITDA fell 15.4% to $49 million. Net income fell to $500,000, or a penny per share, from $10.7 million, or $0.35 per share, in last year's quarter.

The numbers were hardly impressive, but Isle of Capri did have some pretty good excuses.

Results were affected by construction disruption at the company's properties in Biloxi, Miss., and Black Hawk, Colo. The recent hurricane activity along the Gulf Coast also hurt operations in Biloxi, and tropical storms forced a sustained closing of the property in the Bahamas. Lastly, new development expense "increased significantly" because of election-related efforts in Florida and Iowa, as well as the ongoing investment in the United Kingdom.

That aside, I think the question to ask here is whether Isle of Capri has anything that anybody else would actually want.

The answer probably depends on who you are. If you are a top-tier regional player such as Harrah's or Ameristar, the answer is most likely no. As we've noted on a few occasions, aside from the company's facilities in Black Hawk and in Lake Charles, La., Isle of Capri is not a major player in any market where it faces real competition.

For example, Isle of Capri edges out Alliance Gaming's Rainbow Casino for second place in the Vicksburg, Miss., market. However, market leader Ameristar just about doubled Isle of Capri's revenue output during the past quarter, and all four properties in the market are located along the same road. The company doesn't appear any more attractive in the Kansas City market, where -- despite reporting improved results -- its revenue is a distant fourth place to three clearly superior competitors in Ameristar, Harrah's, and Penn National's new prize, Argosy Gaming (see Penn National Bets on Argosy):

Casino Q3 2004 Q3 2003
Ameristar $60.6 million $54.7 million
Harrah's $47.7 million $55.4 million
Argosy $36.3 million $23.4 million
Isle of Capri $26.8 million $23.8 million
On the plus side, Isle of Capri also owns a racetrack in Pompano Beach, Fla., as well as the exclusive right to negotiate the purchase of the Miami Jai Alai. The value of both properties increased significantly early this month when a Florida state referendum passed that will allow local voters in Broward and Dade Counties -- where those properties are located -- to vote on the introduction of slot machines at pari-mutuel facilities.

This may make Isle of Capri an attractive target in the future for Penn National, which owns racetracks that have or will have slot machines in West Virginia, Pennsylvania, and Maine. And while Isle of Capri's riverboat casino operations wouldn't provide an upgrade in quality, its niche operations -- particularly in Iowa, Booneville, Miss., and a couple of properties in Mississippi -- might also be attractive to Penn.

But even that interest is probably marginal at best.

The bottom line is that Isle of Capri doesn't feature the quality of operation that a top casino operator would be interested in. And as I said before (see Another Take on Isle: Don't Bother), if you believe in investing in only the best companies in a given industry -- as the Fool advocates -- I think that Isle of Capri is a pretty easy company to cross off your investment wish list.

For more on Isle Capri and casino operators, check out:

Fool contributor Jeff Hwang owns shares of Ameristar Casinos.