Don't let the name fool you. NevadaGold & Casinos (AMEX:UWN) don't run a casino in Las Vegas or anywhere else in Nevada. In fact, the company is based in Houston. It also doesn't own a gold mine. Investors probably won't feel as if they've struck gold with the micro cap's stock, either.

Nevada Gold's principal properties include its wholly owned Colorado Grande Casino in Cripple Creek, Colo., which it acquired this past April, and its 43% interest in two casinos in Black Hawk, Colo., with the remaining interest controlled by Isle of Capri (NASDAQ:ISLE). The company is also active in the tribal casino market and in 2001 assisted in the development and financing of the River Rock Casino in Sonoma, Calif. The company earns a "credit enhancement fee" equal to 20% of the tribal casino's earnings before interest, taxes, depreciation, and amortization. There's just one problem for Nevada Gold: The deal ends on March 31, 2008.

The company's other operating casino, a joint venture, is the Route 66 Casino west of Albuquerque, N.M. In place there is a five-year agreement that would give 16% of gross revenue from the gaming devices to the partners. However, here again Nevada Gold faces a dilemma: Because of a dispute between the partners, there have been no cash disbursements since the contract's effective date of September 2003.

It may not come as a surprise that the company's first-quarter results were mixed. Revenue increased by $2.4 million, but nearly all of that amount -- $2.3 million -- came from the April 2005 acquisition of the Colorado Grande Casino. Of the remainder, $567,000 came from a 42% increase in the credit enhancement fees from the River Rock project. And since the deal ends in 2008, the company can't count on that revenue for the long term.

Net income, meanwhile, fell 10.3% as a result of the Black Hawk casino contributions falling by 12.7%. Earnings per share were unchanged, but that was because the company has been repurchasing its shares.

Nonetheless, analysts expect the company to earn $0.53 in fiscal 2006 and for earnings to grow strongly to $0.85 a share the following year. At 12.8 times forward fiscal 2007 earnings, the stock actually looks attractive -- especially if the company can grow earnings 22.5% a year, as analysts expect, for the next five years.

Why the optimism? The company has three tribal casino deals signed and recently entered the racino (racetrack-casino) market in New York through a joint venture. What's more, the company intends to enter into one tribal deal and acquire additional gaming properties every year.

Tribal gaming is becoming a very competitive market. But while it offers access to major population centers, the contracts are not long-term, as Nevada Gold knows from its River Rock deal. The fact that the company is expected to obtain much of its long-term growth from acquisitions is also a potential liability because it's an uncertain route to profitability. The purchase price for the acquired companies is an inherent "what if?" Thus, the combination of short-term contracts and acquisition-based growth in Nevada Gold makes me see giants like Harrah's Entertainment (NYSE:HET) and MGM Mirage (NYSE:MGM) the best way to make a buck in gaming.

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Fool contributor W.D. Crotty does not own shares in any of the companies mentioned. Click here to see The Motley Fool's disclosure policy.