Location, location location: casinos are no exception to this rule for success, especially now that utility costs vary so widely. Because they have more facilities in Nevada, Bear Stearns believes that Mandalay Resort Group, MGM Mirage and Station Casinos could suffer most from escalating energy prices. Harrah's, Park Place Entertainment, Aztar and Boyd Gaming may also feel the impact of heftier energy bills, although it expects them to be mitigated by their more diverse portfolios.

Nevada gaming firms may also face another problem as higher energy prices reduce entertainment spending by consumers due to increases in the cost of utilities that are averaging nearly $600 a year per household.

On the other hand, geographic diversity is no guarantee that energy costs won't have a negative impact on profits. Casinos in Atlantic City, Connecticut and some riverboat markets are also starting to feel pressure from the rising cost of electricity. The most detrimental impact of gaming earnings this year may not result from the cost of energy, however, but from a slowing economy. Revenue has declined in a number of gaming markets, according to Bear Stearns, which it attributes to the uncertain outlook for the economy.