Isle of Capri Casinos (NASDAQ:ISLE)

Founded in 1990, Isle of Capri Casinos, Inc. (ISLE) is one of the leading developers and owners of gaming and entertainment facilities, operating 13 casinos in 11 locations. The company mainly owns and operates riverboat and dockside casinos, including land-based casinos like Black Hawk in Colorado. The company’s major chunk of revenue is generated from casinos, while hotel rooms, food and beverages, and others constitute less than 17% of the overall proceeds.

The U.S. casino industry has witnessed huge growth with estimated 54.1 million Americans visiting commercial casinos last year, thereby generating revenue of $28.9 billion. Further, with new regulations in states like Florida and Pennsylvania, and growing acceptability, this rising trend is likely to continue. Globally, casino revenues are also expected to surpass the $100 billion mark in the next five years, a growth of around 46%.

The company, in the recent past, has seen good results in Mississippi, driven by Biloxi, mainly due to increase in margins. Further, the company is embarking in several new markets with massive capital investments. Major growth in 2007 will come from the opening of three new slot parlors in South Florida’s booming market. The new parlors are expected to do well, as South Florida constitutes a large number of people who are retired and are generally more affluent and have more time to spend on leisure activities.

The company’s new Waterloo, Iowa, facility will also witness superior revenues benefiting from a low tax rate in the state and lack of gaming options in the market. Additionally, backed by the company’s existing good performance, appealing industry outlook, and plans to venture into new booming markets like Singapore, it appears that Isle’s uptrend will continue in 2007.