Who needs the thrill of striding into a casino and wagering one’s entire pay cheque on a roll of the dice when casino stocks offer a similar risk and reward? Intrepid investors who bought shares of US industry leaders in early March have hit the jackpot but would be wise to cash in their chips. Since then, two deeply indebted operators, MGM Mirage and Las Vegas Sands, jumped more than 500 and 600 per cent, respectively. Less imperilled Wynn Resorts rose more than 120 per cent, rallying nearly 15 per cent on Tuesday after reporting a quarterly loss. All three have either raised expensive cash or had to negotiate with lenders or both and none is out of the woods completely.

Following their bounce, the big operators remain well off their 2007 highs, but the risk-reward equation is starting to look like a sucker’s bet. Las Vegas Sands trades about nine times 2010 enterprise value to earnings before interest, tax, depreciation and amortisation – a multiple that implies not just survival but a rapid recovery. Wynn, which deserves a higher valuation, also looks rich at 12 times EV/ebitda. Measures like revenue per available room and occupancy rates have stabilised but should remain below peak levels for some time. This is a challenge for high fixed-cost companies facing hefty debt.