(FORTUNE Magazine) – Just think, gamblers! If you had backed the house instead of a hunch, look how well you would have done since January. Investments in casino companies -- a $9.3 billion industry and growing -- have zoomed 41.8% this year, leaving Standard & Poor's 500 index in the dust. Daniel Lee, a security analyst with Drexel Burnham Lambert, believes that in addition to the national boom in gambling, Wall Street is getting closer to seeing the true value of casino properties in Nevada. The best may be over for Hilton Hotels, which led the industry share price surge in May when CEO Barron Hilton announced he would be open to offers for the company. But Lee believes there are other good stock picks, among them Circus Circus and Caesars World. Their share prices rose more than 42% and 22%, respectively, through June 1. Circus Circus, already among the best- managed companies in the business, is expected to do even better when the Excalibur, its 4,032-room hotel-casino in Las Vegas, opens next summer. John Uphoff of Raymond James & Associates likes Showboat (shares are up 58.6%). He says Showboat's Atlantic City casino will benefit when Donald Trump opens his Taj Mahal in mid-1990. The two emporiums will be next-door neighbors and even connected by a walkway. Many gamblers like to try different places to change their luck. Another odds-on favorite that might benefit from this flurry of casino building is International Game Technology. The Reno company makes 55% of the slot machines sold in the U.S., giving it 1988 revenues of $98.7 million.

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