Macau's gaming revenue has grown for 10-straight months after two years of sharp declines. And the improvement has sent gaming stocks with exposure to Macau higher. As a result, Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), Melco Resorts (NASDAQ:MLCO), and MGM Resorts (NYSE:MGM) all will ride the tide of higher revenue.

If one recent projection is correct, the June revenue-growth figure could be the best Macau has seen in years. And it may not be as crazy a projection as it seems. 

Macau's skyline at night.

Image source: Getty Images.

Growth projections are getting crazy

So far in 2017, Macau's gaming revenue is up 15.8% from a year ago. But analyst Richard Huang at Nomura thinks June's revenue increase will be 33% versus a year ago. That sounds like a lot of growth, and it is, but it may not be as big as you think.

June was the absolute low in gaming, with $1.98 billion in revenue. Thirty-three percent growth would be $2.63 billion in revenue, which would actually be a slight decline from May's $2.83 billion in revenue. In other words, June could be a big month for growth year over year, but it won't be a huge month in the context of how Macau has been performing in 2017.

A crackdown isn't killing gaming this time around

What may be more notable for gaming companies, particularly those that rely on VIP gamblers (WYNN, MLCO), is that a crackdown on gambling activities in China doesn't appear to be affecting Macau. There was a crackdown on proxy betting from Chinese gamblers, which Nomura thinks could result in a 10% decrease in VIP gambling volumes. But the growth of the industry looks like it's offsetting any impact of the crackdown. 

Recently, Crown Resorts' employees were found guilty for promoting gambling in China, and other gambling-related charges. Crown is formerly a major owner and funder of Melco Resorts (formerly Melco Crown), so this legal ruling could have a cascading effect on how Macau's casinos bring customers to the area. For now, it doesn't appear to be having a lot of impact.

What to make of Macau today

The expected growth in gaming revenue in June, and the crackdown on gambling in Mainland, China, should be taken as a positive sign for gaming investors. The last time China cracked down on gambling, primarily through VIP junkets, it sent the Macau market into a two-year tailspin. 

With more resorts, more hotel rooms, more entertainment options, and better infrastructure to the world outside of China, Macau appears to be on better footing than last time a crackdown took place. And that should insulate gaming companies from the ups and downs of VIP gaming, which can fluctuate wildly depending on Chinese policy.

This time around, a gaming crackdown in China isn't a reason to run for the hills, far away from gaming stocks.

Travis Hoium owns shares of Wynn Resorts. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.