You know the old Wall Street saying: "Buy the rumor, sell the news."

In casino land, the sentence requires a modest rewrite to say, "Buy the rumor, ignore the news" to accommodate investors' desire for anything positive from Macau to Las Vegas.

On Monday, the Chinese government said that second-quarter revenue from casinos dropped 12% from the year-ago quarter and slipped 2.3% from the first quarter of 2009. There was a 20.4% decline in visitors in May versus the year-ago period.

Still, shares of Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), MGM Mirage (NYSE:MGM), and Melco Crown Entertainment (NASDAQ:MPEL) produced solid advances that day.

More talk and some action
Las Vegas Sands delivered a 14.8% gain in honor of what has become speculation dished out in chapters -- the prospect of an IPO on the Hong Kong Stock Exchange for its Macau business. The possible IPO has transcended the rumor stage because company executives have been chatting up the possibility for months.

In the latest chapter, Bloomberg, citing an unnamed person "with knowledge of the matter," said Monday that the Hong Kong IPO application could be filed next month. Bloomberg said Las Vegas Sands would try to sell new debt and renegotiate terms with lenders.

On Tuesday, Wynn Resorts topped its rival, saying it had applied to the Hong Kong Stock Exchange for a "possible listing" of its Macau property. With that tangible news, Wynn's shares slipped Tuesday -- but the stock was up again Wednesday.

Betting for the future
Macau isn't the only gambling venue where investors shrug off unwelcome numbers and bet on hope.

On July 9, Nevada's Gaming Board said revenue from Las Vegas Strip casinos fell in May for the 17th consecutive month, according to the Las Vegas Sun. The 6.3% decline versus May 2008 ended a streak of seven consecutive double-digit monthly losses when compared to previous reporting periods. Statewide, gambling operators' revenue in May fell 8.3% from the year-ago period.

Those numbers were good enough for investors. Shares of Las Vegas Sands, MGM Mirage, and Wynn Resorts rose that day.

Let's wager that casino stocks aren't going to be terrible forever. However, investors must watch out for the wild stock-price swings, erratic trading volumes, and the ever-present debt renegotiations. They also must beware of the uncertainty over China's restrictions on visitors to Macau and the uncertain impact in Las Vegas of ambitious construction plans.

With all these moving parts, the next time you hear public musings by casino executives or yet another rumor, keep in mind the comment by Richard Nixon's attorney general John Mitchell: "Watch what we do, not what we say."

Fool contributor Robert Steyer doesn't own shares of companies mentioned in this article. Melco Crown Entertainment is a Motley Fool Global Gains selection. The Motley Fool has a disclosure policy.