Shares of Boyd Entertainment (NYSE:BYD), operators of the Stardust, Sam's Town, and seven other casino properties, plunged more than 9% yesterday after the company announced a fairly severe earnings miss. For the quarter, Boyd reported GAAP earnings of $0.07, compared with $0.26 a year ago. The company points to four separate issues: the Iraq war, the general economy, pre-opening expenses, and higher taxes.

Now I ask you, which of these surprised anyone? Sure, all are plausible reasons for earnings to come in lower, but assuming you play the earnings game at all, would any be an excuse for a miss? And, yes, pre-opening expenses ($0.11 per share) relating to the Borgata in Atlantic City, Boyd's new $1.1 billion joint venture with MGM Mirage (NYSE:MGG), were one-time costs (indeed in many cases, such expenses are capitalized). But the war?!? Come on!

In fact, almost the entire difference between this quarter's results and those from last year is the result of higher gaming expenses -- expenses that can in turn be attributed to empty state coffers in jurisdictions where Boyd operates, particularly Illinois and Indiana. But taxes on games have risen even in Nevada, where the casino is king. That this has hurt casino operators should come as no surprise at all, nor should it be any great shock that gaming is an easy target for desperate states.

Let's be clear, states started dancing with the gambling devil at least in part to juice tax receipts. If things get worse for the sates, expect the money-grab to impact every gaming company operating in jurisdictions desperate for cash -- i.e., any state not named Colorado or Vermont. So far, rivals Park Place (NYSE:PPE) Station Casinos (NYSE:STN), Mandalay Bay (NYSE:MBG), and others haven't shown nearly the same impact -- either to earnings or to stock price. Station Casinos has more than doubled in the past year.

Perhaps their time is yet to come. Like all other "sin" industries, when times get tough in the state capitols, gamers may well find themselves once more the target of the tax man. Not a whole lot the casino operators or their investors can do about that. Except maybe choose not to back the house in this particular high-stakes game.

Gaming is an industry that requires huge amounts of leverage. "One-time" costs like "pre-opening expenses" can be wiped away with the magic pro forma wand, but remember this: In the casino business, even a billion-dollar property can head towards obsolescence nearly the moment it opens, if the next big thing opens down the street.