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Gaming Stocks a Sure Thing?

Is it time to make a bet on casino stocks? They're down 12 percent this year, but Jefferies analyst Lawrence Klatzkin says investors can find some winners, if they know where to look.

At the top of his list is MGMMirage. Klatzkin says it's got a lot going for it.

"I have optimism in gaming, but in particular MGM," he told CNBC. "Not only is it diversifying, but you're looking at a large buyer of stock."

  • Video: Watch the entire analyst interview (3:56)

A fund owned by the government of Dubai is making major investments in the hotel and casino operator.

Klatzkin sees the slowing U.S. economy as an asset.

"People gamble more when it's bad than when it's good," he said.

He advises potential investors to look for companies with good locations and promising future growth projects. His other choices in the gaming space are Las Vegas Sands and Scientific Games.

Klatzkin even sees strong potential for some less-favored casino companies, like Trump Entertainment Resorts.

"They have some good properties," he said. "They need to fix things up in the next three years."

A number of new casinos -- challengers to Trump's properties -- will open in Atlantic City in the next several years.

Klatzkin owns and makes a market in MGM Mirage, Las Vegas Sands and Scientific Games.

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