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) -- Casino expectations are so low for the fourth quarter that it would be hard for operators to screw up.

These low expectations, coupled with reports last week from gaming technology companies like

International Game Technologies

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WMS Industries

(WMS) - Get Advanced Drainage Systems, Inc. Report


Bally Technology


, which underwhelmed the market and sent stocks lower across the sector, might, however, be evidence of room for some upside.

And while investors shouldn't expect too many surprises coming out of the quarter for any of the casinos (like upbeat 2010 outlooks), those stocks with substantial investments in the Macau market could fair better than the rest.

Just look at the numbers. Macau gaming revenue surged 63.3% in January to a record $1.58 billion.

The Las Vegas strip hasn't been as lucky, as the U.S. leisure and convention business remains unstable. In December, the gambling epicenter reported its first increase in gaming revenue, but experts say this pace is unsustainable.

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As a result, KeyBan analyst Dennis Forst expects weak results from all of the casino players' Las Vegas units.

What does it all translate to as the casinos report their earnings for the past quarter -- and seek better prospects in coming quarter. Which casino stocks are the ones to watch? Read on.....

Las Vegas Sands

Las Vegas Sands

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has given up its gains from the beginning of the year after disappointment from the gaming technology sector. But with expectations for Sands being reduced significantly for the casino operator, any good news coming out of their earnings report could spur stock gains, Chris Jones, analyst at Telsey Advisory Group, says.

Macau, of course, is expected to bolster Sands' results. But investors should also listen up for updates regarding the company's timeline for its first Singapore casino.

Any announcement of a definitive opening date, could lift Sands shares, Jones predicts.

Still, there is some concern for Sands going forward. Last week, Sands Chief Operating Officer Michael Leven said during an investor conference that room revenue in Las Vegas won't recover until the very earliest 2011.

And any tightening of Macau's visa restrictions or China's liquidity could impact revenue.

Wall Street is calling for earnings of 2 cents a share for Las Vegas Sands on revenue of $1.23 billion.

Wynn Resorts

Investors will also be looking for -- if not outright needing -- strong Macau results for

Wynn Resorts

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"We are expecting mediocre numbers from everywhere except Macau, which will bode well for Las Vegas Sands and Wynn," Forst says.

According to J.P. Morgan estimates, Wynn saw about 65% of its earnings come from Macau in 2009.

Analysts expect earnings of 11 cents a share for Wynn on revenue of $782.4 million.

MGM Mirage

CityCenter is still the focus for

MGM Mirage

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in the fourth quarter. While it will be too soon to see what effect the massive hotel-casino will really have on business and the Las Vegas strip, early condo sales in CityCenter and the strength of the opening offer glimpses of the future for Vegas.

Analysts expect a loss for MGM of 18 cents on revenue of $1.48 billion.

Macau will also garner more attention for MGM this quarter, as MGM plows ahead with plans for an initial public offering of its Macau assets on the Hong Kong stock exchange.

But this IPO isn't without its drama. Last year, New Jersey's Division of Gaming Enforcement issued a confidential report saying MGM should disassociate from Pansy Ho, its joint venture partner in Macau, labeling her an "unsuitable" business partner.

As a result, MGM is mulling the sale of its 50% stake in the Borgata property, which it manages with

Boyd Gaming

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With Atlantic City especially pressured from the economic downturn and the expansion of gaming througout the Northeast, it only makes sense that MGM would opt for Macau.

Currently, there are not many bidders willing to pay MGM's asking price for the Borgata (reportedly between $700 million an $850 million), which could result in some material writedown for the company.

Still, pulling out of Atlantic City could ultimately look good for MGM from a strategic perspective, Jones says.

Penn National Gaming


Penn National Gaming

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, analysts are forecasting earnings of 19 cents on revenue of $578.4 million. "I would be satisfied if they make that number," Forst says.

"Regional gaming is such a disaster," Jones says.

But while Penn should see top-line benefit from table games entering the Pennsylvania and West Virginia markets, it won't do much for profit, Forst says.

Penn also lost some major deals during the quarter. It lost its bid for bankrupt Las Vegas casino Fontainebleau to

Carl Icahn

, and last week was denied the Aqueduct Race Track in N.Y., despite being the highest bidder.

All o which leads to the big question of the quarter: What is the company's strategy for growth? Investors should also keep their eyes on the company's execution issue and ability to control expenses, Jones says.

Penn is set to report its earnings results on Thursday.

--Reported by Jeanine Poggi in New York.


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