When analysts make forecasts for casino companies, it’s more gamble than sure thing. There tend to be many surprises and disappointments.

With casino operators having issued quarterly financial statements in recent weeks, some of the disappointments are no surprise. With few exceptions, earnings (or losses) per share were worse than the year-ago quarter.

The industry continues wrestling with the revenge of debt-financing, consumers pulling back and companies trying to balance the desire to expand with the need for better debt management and cost controls.

For long-term investors trying to navigate what should be a still-grim second half of 2009 and an uncertain 2010, here are a few takeaways.

A disappointing quarter for Not Vegas
Just a few months ago, the most attractive companies were those that had little or no exposure to Las Vegas, Atlantic City, and Macau. Many produced earnings that beat Wall Street’s expectations.

They’re still profitable. But for the latest quarter, Penn National Gaming , Ameristar Casinos , and Pinnacle Entertainment served up disappointing earnings -- excluding one-time items -- versus analysts’ estimates. Isle of Capri Casinos , which also reported a profit, was the exception, beating Wall Street’s forecast.

I’m not sure if sell-side analysts got caught up in irrational exuberance over the Not Vegas casino companies. By contrast, Las Vegas Sands (NYSE: LVS) and Wynn Resorts (Nasdaq: WYNN) beat Wall Street estimates, though MGM Mirage ’s (NYSE: MGM) latest loss-per-share was worse than analysts had forecast.

Although the recession affects all casino companies, the analyst consensus seems to expect a better response by the ‘staycation’ casinos -- those that attract gamblers who live within a reasonable driving distance and/or that are located where there is little competition from other casinos or racetracks.

One quarter doesn’t make a trend, but if you believe the industry’s recovery depends more on the mass gambling market than on the high-rollers and destination-vacation crowd, then Not Vegas should be your destination. Just make sure your choice isn’t headed for a debt-trap that has snared the giants.

Bullish in the China shop?
The Macau gambling market continues to have more “ifs” than a Rudyard Kipling poem.

If the Chinese government relaxes restrictions on visits from the mainland. If China makes good on many infrastructure projects to encourage and accommodate more Macau visitors. If Las Vegas Sands and Wynn Resorts raise money via IPOs or other means. If companies continue building new casinos to attract high-roller clients. If these companies don’t overbuild.

Macau is already the world’s largest gambling market, and it is so important that Las Vegas Sands and Wynn Resorts both rely more on China than Las Vegas for revenue. During the most recent quarter, both venues took a hit.

Among companies traded formally in the U.S., the other major player in Macau is Hong Kong-based Melco Crown Entertainment (Nasdaq: MPEL), and it performed worse than analysts had expected during the most recent quarter. Continued...