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• By Kin Cheung, AP The Las Vegas Sands casino sits behind the Fishermans Wharf in Macau.

Shares of casino operators have rocketed from March 2009 lows, outstripping even the solid performance by the broad market. Las Vegas Sands (LVS), Wynn Resorts (WYNN)a nd MGM Resorts (MGM) are up 3,299%, 722% and 546%, respectively, since then, topping the Standard & Poor's 500's 98% rise.

Even so, unlike the S&P 500, which is just 15% off its high, casino stocks other than Wynn remain far from their peak levels in 2007. Gamblers, worrying more about paying rent than drawing an inside straight, are slowly returning to Las Vegas.

The slow comeback in casino stocks is a reminder of how slow the economy's recovery has been, especially for things that aren't essential. Since gambling is only affordable when people are confident of the future and have paid their other bills, casino stocks' relative weakness shows how fragile confidence remains.

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"Gaming is very discretionary. People aren't going to be gaming until they're confident in the future," says Ryan Worst of Brean Murray Carret.

Investors examining the gaming market are finding the:

•Rising role of China's Macau region. Rapidly growing Asian economies have powered the Macau market to four times larger than Las Vegas, says Bryan Maher of Citadel. Macau is growing faster, too. Gaming revenue rose just 3% last year in Las Vegas, 58% in Macau, he says.

The fact Wynn and Las Vegas Sands have a larger exposure to Macau than the other casino operators is the reason they have been standouts.

•Restructuring of debt is critical. One of the biggest drivers of the casino stocks has been the companies' abilities to push back maturities on their debts, says Steven Ruggiero of CRT Capital. This is helping them manage their interest payments while convention business heals, but consumers remain weak, he says.

•Improving outlook for 2011. Wynn, Ameristar (ASCA) and Penn National (PENN) have all indicated in their quarterly results that 2011 looks better than 2010, Ruggiero says. Meanwhile, there are scant plans for new rooms in Las Vegas for two years, he says, which could bode well for room rates.

Even so, investors should expect a slow recovery for U.S. casino stocks going forward, says Maher, who rates Wynn, MGM and Las Vegas Sands a hold. "You're not seeing consumers say, 'Let's go to Vegas' like in '05, '06 and '07," he says. "You need that for the stocks to do something."

Source: http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFk6REYXZ117w2sNb186saBCiao3g&url=http://www.usatoday.com/money/perfi/stocks/2011-02-17-casinos17_ST_N.htm