(By Tim - iStockAnalyst Writer) Yesterday was a rare cheerful on for the beaten down gaming stocks. It appears the big news was that the 67% drop in income reported by MGM was not as bad as investors feared even as the company failed to meet lowered estimates. Here are the results of some of the major players:

• Las Vegas Sands (LVS) +80%
• MGM Mirage (MGM) +33%
• Boyd Gaming (BYD) +28%
• Wynn Resorts (WYNN) +25%

Although these are great one day gains, first remember all of these stocks are 75% to 95% off their not too recent highs. These companies have big payrolls, huge debt loads and need increasing numbers of visitors to their mega-resort hotels. The current global economic difficulties will hit these companies hard and MGM Mirage management voiced concerns the slowdown will continue into 2009.

So why did the stock move up so strongly? I think there are a couple of factors in play. First, there was probably a significant amount of short covering yesterday. If you read my article concerning the short squeeze on Volkswagen, I listed MGM Mirage as a company with a lot of short interest. All four stocks listed above are favorites of the short crowd. Las Vegas Sands gave reassurances that their new Singapore resort was not behind schedule to open late in 2009 contradicting reports in the local papers. Finally, the WSJ had a positive report on Steve Wynn and the new $2.3 billion resort his company will open in December.

Steve Wynn has been a leader of several Las Vegas turnarounds starting with the opening of the Mirage Hotel in 1989. The Mirage started a run of construction and growth in Las Vegas that continues to this day. He next built the Bellagio which opened in 1998. The Bellagio was another level of luxury for Las Vegas and broadened the entertainment options for Las Vegas visitors. MGM Grand purchased the Mirage Group in 2000 and Mr. Wynn went out on his own and opened his Wynn Las Vegas in 2005. Many believe that Wynn has a magic touch for determining the next direction of Las Vegas and gaming growth.

Boyd Group aside, these companies are controlled by aggressive multibillionaires, Steve Wynn, Sheldon Adelson and Kirk Kerkorian. These guys have seen their worth drop by billions of dollars and I have a hunch they are anxious to rebuild their wealth. The MGM Mirage, Las Vegas Sands and Wynn Resorts have major projects under construction that will significantly enhance their revenues upon completion. The problem area for all is acquiring funding and covering debt payments until the world's economic climate improves and vacationers again flock to the gaming resorts. For these gaming companies the future upside is tremendous but it appears the next several quarters will be very difficult. These stocks could give a nice short term upside move but I believe the big money is still a ways in the future.