Anyone who has visited a casino has probably seen firsthand just how boisterous and exciting they can be: slot enthusiasts busily pumping coins into their favorite machines, roulette players eagerly stacking piles of colorful chips on the table, enthusiastic craps players encouraging the dice to bounce their way. With throngs of people either testing their luck or crowding around the tables waiting for an open spot, every square inch seems to be buzzing with activity.

In even the slowest and least popular casinos, vast amounts of cash are changing hands virtually every minute of every day. Occasionally, Lady Luck decides to smile on the players, allowing high-fives around the blackjack table, or screams of joy from a fortunate slot player that manages to line up just the right combination of symbols. At the end of the day, though, the vast majority of the chips always manage to find their way back to the dealer’s side of the table.

Rather than fighting the house at its own game, why not harness the power of its immutable mathematical advantage within your own portfolio?

Casinos Hit the Mainstream
Over the last decade, casino gaming has become an increasingly mainstream -- and socially accepted -- form of recreational entertainment. At one point in time, the industry was handcuffed by political concerns and legal restrictions, with casino owners only allowed to conduct business in two places: Nevada and Atlantic City. However, cash-strapped states have since turned to casino gaming as a reliable source of tax revenues, and the introduction of new gaming jurisdictions has allowed casinos to spread throughout the heartland of the country.

Those sweeping changes have created a profound shift in the industry. First, favorable legislation has opened up a number of profitable new markets for casino operators from Pennsylvania to the Gulf Coast. At the same time, the proliferation of riverboats, tribal casinos, and racinos (casinos that operate within horse racetracks) has introduced gambling to the masses, creating tens of millions of avid new customers.

As the table shows, gaming is no longer limited to the far corners of the country. Each of the cities/regions listed below now rakes in more than half a billion dollars in annual revenues from gamblers.

Gaming’s International Reach
While the popularity of gaming continues to expand throughout the United States, it is by no means limited to our borders. Just as domestic players have more choices now than ever before, those overseas can also try their luck in exotic destinations ranging from Cairo to Moscow.

Though casinos have long been a fixture throughout Australia and Western Europe, outdated gaming laws have recently been relaxed in several places -- including the heavily regulated United Kingdom market. At the same time, a number of countries are counting on the construction of new casino resorts as a surefire way to boost tourism, which will soon pave the way for foreign development in untapped regions such as Singapore.

Perhaps the most promising market is Macau, a former Portuguese colony located just west of Hong Kong that is widely considered to be the “Las Vegas of the East.” As the gateway to China, Macau is poised to cash in on the rapid economic expansion of the world’s most populous nation. Over three billion people live within a short five-hour flight, and since the Chinese government loosened travel restrictions several years ago, tens of millions of visitors have poured into Macau from the mainland (where gambling is strictly forbidden).

Once a seedy playground for high-rollers, foreign developers are rapidly transforming the region into a world-class tourist destination. Despite the explosive growth of the area over the past few years, the number of firms licensed to conduct business in Macau has remained fixed. Those companies with licenses to operate should be reaping the benefits for years to come.

Estimates suggest that more than 35 million visitors will play in Macau within the next several years. And with Asian players generally wagering far more than their American counterparts, table games in Macau typically outperform those in Las Vegas by a wide 6-1 margin. As a result, gaming revenues in Macau have soared. Given the burgeoning growth of the Chinese middle class, this total is expected to rise at a phenomenal +22% annual clip over the next five years.

Going forward, global casino revenues are expected to grow at a brisk annual rate of +8%. At that pace, worldwide gaming receipts should top the $100 billion mark by 2009 -- one-third of which will be generated in foreign markets. And given the heavy consolidation that has taken place in the gaming sector over the past few years, the spoils will be spread among a relatively small number of global players.

Additional Industry Profiles . . .

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