Now that its stock has nearly quintupled since its March low, what can Wynn Resorts (NASDAQ:WYNN) do for an encore?

Well, it can complete Encore at Wynn Macau -- adding a hotel, 400 luxury villas, more gambling space, and more retail space, all now scheduled for a mid-2010 opening. Wynn's aggressive expansion will be aided by the company's plan to sell a piece of its Macau operation via an initial public offering on the Hong Kong Stock Exchange.

Wynn advanced its IPO plan on Sept. 11 by filing a financial report with the Hong Kong exchange and the Securities and Exchange Commission, outlining its goals for Macau. Although Wynn didn't reveal how much it wants to raise, The Wall Street Journal, citing unnamed sources, said Wynn could sell a 20% stake for $1 billion.

Like its competitor, Las Vegas Sands (NYSE:LVS), which also is contemplating an IPO of its China business, Wynn is banking on an expanding Macau market, which has overtaken Las Vegas as the world's biggest source of gambling revenue.

There's plenty of other competition – more than 30 casinos, plus several others in the planning or construction stages. There's the Hong Kong-based Melco Crown Entertainment (Nasdaq; MPEL), which opened a giant luxury casino complex in June, and MGM Mirage (NYSE:MGM). And there are two more Chinese companiesGalaxy Entertainment Group and SJM Holdings – which trade publicly on the Hong Kong Stock Exchange. SJM is scheduled to open a new casino this weekend.

Calling all big spenders
A big test for Wynn will be how well its non-gambling business -- hotels, food, entertainment -- does in Macau. Wynn and its peers are trying to change the gambling environment there, not only by attracting more high-rollers, but also by luring visitors who are willing to stay longer and do more than gamble.

Macau has spent decades catering primarily to day-trippers from Hong Kong and the Chinese mainland, folks who don't necessarily care about embellishments. When China opened Macau's casino industry to competition in 2002, it paved the way for a Far East version of Las Vegas.

How important is non-gambling for a gambling company? For the six months ended June 30, casino games accounted for 94% of Wynn's Macau operation. Meanwhile, casino games contributed just 66% of total revenue in its Las Vegas operations.

Trading or investing
Investors with long-term horizons should take note: Although Wynn's stock has soared since early March, the stock, now in the high $60s, remains well below its 52-week high of $104.03.

And if you placed a bet 12 months ago, or even 24 months ago, on the S&P 500-stock index, you would have done better than investing in Wynn -- although the gap has been closing quickly.

The stock's sharp movements and the uncertain casino environment -- from evaluating debt management, to guessing about discretionary spending, to forecasting Chinese government policies -- have kept most analysts on the fence. Right now, there are 12 holds, three buys, and four negative ratings.

Maybe some were too slow to predict Wynn's fall, and maybe some were too slow to forecast the nowhere-to-go-but-up inflection point. Judging from Wall Street's reaction, however, Wynn still looks like a crapshoot for the long-term investor.

I've told you what I think, but what's your bet? Let me know in the comments section below.

Fool contributor Robert Steyer doesn't own shares of any companies cited in this story. The Fool has a disclosure policy.