Gaming Partners International Company (NASDAQ: GPIC) provides high-end casino chips and table gaming equipment primarily to casinos but also to consumers. Last year was a banner year for the company, which supplied equipment to open two large casinos in Macau. However, in 3Q 2007 revenue is down 25% to just over $15 million and gross profit declined $800,000. Net income plummeted more than 50% to $387,000 or $0.05 diluted EPS. YTD, Gaming Partners has posted a net loss of $662,000 in contrast to $5 million net income YTD for 2006. Despite the declines in 3Q, those numbers are much better than the first half of the year.

CEO Gerard Charlier was optimistic that the company would post a profit for the year, given that Gaming Partners controls a major share of RFID gaming chips for casinos worldwide and is the exclusive distributor of RFID chips in the US. Unfortunately, the company's chips, when tested for lead content, contained more than 160 times the federal lead limit for consumer products. One chip from a Las Vegas casino tested at 45% lead content. CEO Charlier stated that the company's products are safe when used as designed, but an Arizona public health official said spreading 1000 of them on the ground would constitute a "federal Superfund site."

The stock currently trades at $8.99, down $0.87, but may be due for an upswing if, in fact, the company's problems are all behind it. Gambling certainly is not losing its popularity.