Investors in the gambling business have enough worries, from the recession to balance-sheet balancing acts to disappointments in Las Vegas and Macau.

So in honor of the Atlantic hurricane season -- June through November -- and Macau typhoon season -- April to October -- let me offer another investment warning, especially for those with short-term horizons. Acts of God can affect casino stocks just as sharply as better-known risk factors.

Case in point ...
The most extreme example was Hurricane Katrina, which crushed the Mississippi casino industry in August 2005. Some casinos reopened after being repaired or rebuilt; others stayed closed for good.

For example, it took Penn National Gaming (Nasdaq: PENN) 10 months to reopen one casino, and 12 months to reopen another. The company says community damage after horrific storms hurt operations because travel and staffing were affected.

Less violent storms and floods can tilt quarterly revenue and earnings, too. Casinos have insurance, but companies warn investors that claims payments can take a long time. Policies may not cover all losses, and insurance has become more expensive and/or harder to obtain.

Hurricanes, floods, typhoons, blizzards
Companies most vulnerable to natural disasters have prominent portfolios of riverboat, dockside and/or seacoast casinos. In addition to Penn National Gaming, they include Isle of Capri Casinos , Pinnacle Entertainment (NYSE: PNK), Ameristar Casinos (Nasdaq: ASCA), and Boyd Gaming (NYSE: BYD).

Macau typhoons could have an impact on Las Vegas Sands (NYSE: LVS), MGM Mirage (NYSE: MGM), Wynn Resorts (Nasdaq: WYNN), and Melco Crown Entertainment (Nasdaq; MPEL).

Isle of Capri, which also warns that blizzards could affect its Colorado properties, says that although business interruption insurance has provided adequate coverage, the company can't guarantee that future claims will provide "sufficient" payment for damages.

Beware of insurance fine print
Let's take one casino company as an example.

Hurricane Katrina destroyed a Pinnacle Entertainment casino in Mississippi and forced a New Orleans casino to close for 34 days. Hurricane Rita knocked out a Louisiana casino for 16 days. Last year, Hurricanes Gustav and Ike affected a Louisiana casino, and flooding caused the temporary closing of a St. Louis casino on the Mississippi River. This casino has experienced "growing losses" due in part to flood-related closings. Pinnacle is determining if it can relocate the casino.

The company's latest 10-K statement recounts the damage, giving investors a lesson in storm insurance. In 2006, Pinnacle sued three insurers over claims for a Biloxi, Miss. casino that was closed after Hurricane Katrina; the property was later sold. At that point, $192 million in claims had been paid, but Pinnacle was still fighting one insurer in court. Continued...