New Mutual Fund Bets on the House

Ahrens is also feeding quarters into the shares of slot machine manufacturers. "I love the manufacturers," he says. "Every time new casinos are built, it's new business for them."

That's also true, he notes, every time slot machines are allowed in new jurisdictions, as has happened recently in Florida, Pennsylvania and Mexico. They also benefit, he adds, from new product cycles as new types of games and new types of machines are rolled out.

He's betting on International Gaming Technology (IGT Quote), the dominant player with more than 50% of the market, along with its smaller rivals Bally Technologies(BYI Quote) and WMS Industries (WMS Quote).

So far Gaming & Casinos has lagged the S&P 500 by a few percentage points, though a year isn't really a meaningful period to measure in terms of performance. During the three years Ahrens ran the Vice Fund, from 2002 to 2005, he beat the S&P by about 15 percentage points.

Every poker veteran knows that some of your biggest decisions are which hands to pass. In Ahrens' case, his best move came from avoiding the online gambling companies, mostly listed in London, when they were booming a year ago.

They collapsed last summer when Uncle Sam cracked down on their illegal business with tougher enforcement and a new law.

"I was really uncomfortable with the online gambling companies because even before they passed the new law they were operating illegally," he says. Even at current depressed stock prices, he believes they're a bad bet because he predicts a lot of the companies will go bust. If the U.S. ever opens up the market to online poker and gambling again, he adds, the big Las Vegas companies will probably dominate it anyway.

Ahrens' only exposure to the industry is a few online gambling technology companies.