Ironically, the growth of all three companies' share prices during the year was in large part due to the companies' performance--and potential for future growth--in China, not in Nevada. Since Stanley Ho lost his gaming monopoly in the Macau market in 2004, his market share has fallen to 55% as foreign investors invest $20 billion to turn the former Portuguese colony into the gambling capital of China. The three largest foreign investors are billionaires Sheldon Adelson (Las Vegas Sands), Steve Wynn (Wynn Resorts) and Kirk Kerkorian (MGM Mirage).

In November, Las Vegas Sands said it may raise $6 billion to $12 billion from the sale of retail space, along with another $1 million to $4 million in condo sales, in the China market. That same month, Wynn Resorts announced a stock dividend that distributed much of the $900-million cash infusion from a subconcession sale in the China market. It also announced an expansion of operations there, driving further interest in the stock.

In December, proposed privatizations were the principal drivers of valuation growth. Harrah's inked an acquisition agreement valued at $27.8 billion including debt assumption, and Station Casinos received an acquisition proposal valued at nearly $5.2 billion. Additionally, MGM Mirage made serious moves to balance out its gaming operations with more international hotel development deals.

By far the worst performer in the Index was Boyd Gaming, which performed well in the fourth quarter but still finished the year 2.18% below where it stood at the end of 2005. The next worse performer was Harrah's, whose average daily share price is nearly 18% ahead of where it was 12 months ago.

Boyd struggled because its success is based in large part on the locals market in Las Vegas, which has not been strong. After showing strong growth in the first quarter--despite lackluster performance by its new South Coast Casino, which it proceeded to sell--the company's share price hit a 52-week high of $54.52. Three months later, its share price hit a 52-week low of $33.42. Its share price ended the year at $45.31.