Gaming stocks have hit a rough patch after providing solid gains for investors of the last two years. Shares of Las Vegas Sands (NYSE: LVS) have fallen 13% in the past month, and Macau competitors Melco Crown (Nasdaq: MPEL) and Wynn Resorts (Nasdaq: WYNN) have plunged 35% and 20%, respectively. But the biggest loser recently was the company with the most casinos in Macau, SJM Holdings, which fell 25.5% in a single day this week.

So what in the world is causing this massive drop in gaming stocks?

Growth won't last forever
Macau has been feeding on China's growth and in particular on the growing wealth among China's elite. It's the VIP players who can easily lose $1 million or more in a day without batting an eye who drive gaming. If China's growth slows, as analysts are predicting, the wealthy will have less money to lose playing baccarat.

But let's keep China's growth in perspective. Last year, China grew at around 10%, and analysts are expecting that to slow to below 5% by 2016. I'm not sure when the last time analysts were reliably able to predict growth five years in the future, and even if they can, is 5% growth really that bad? The U.S. would love to have a growth rate that high.

The slowdown is already here
Investors are also panicking because Macau's gaming revenue grew at its slowest rate this past month since January. If growth continues to slow, that would throw a wrench in Macau's incredible growth cycle that previously showed no sign of ending.

But, again, some perspective is needed. Gaming revenue grew 38.8% in September! Most analysts weren't predicting growth that high as recently as the second quarter. And now we're disappointed?

What it means for you
Unless China crashes and burns, which isn't out of the realm of possibilities, I think the latest reaction in gaming stocks is way overblown. Even if growth slows to 10% or 20%, Macau is still a very attractive place for investors. The only supply coming on the market in Macau the next year is Sands Cotai Central, and it will be years until Wynn, MGM Resorts (NYSE: MGM), or Melco Crown are able to build additional casinos on the Cotai Strip.

I haven't owned a gaming stock since selling Melco Crown near its peak a few months ago. But now that prices have fallen, I'm considering buying back in. I'll provide my pick for the best gaming stock on Friday. Until then, which stock do you think is best?

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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