A rendering of Wynn Palace, the next resort to be added to Wynn Resorts. Image source: Wynn Resorts. 

Owning gaming stocks is all about risk and reward, just like gambling at a casino. Investors have to balance value they're paying for a stock with growth and the very real reality that gaming spending is discretionary and an economic downturn can dry up even the best resort's business almost overnight.

It's with this risk and reward balance in mind that I'm looking at Wynn Resorts (NASDAQ:WYNN), operator of casinos in Las Vegas and Macau.

What investors are getting in Wynn Resorts
Right now, Wynn Resorts has two megaresort, one on the Las Vegas Strip and the other in Macau. Over the past twelve months those resorts have generated $528.2 million and $1.39 billion in EBITDA -- a proxy for cash flow -- respectively, making them among the most profitable in each region.

CEO and founder Steve Wynn has always built the highest quality offerings wherever he has operated and with Wynn Resorts he's taken that strategy to another level. In Las Vegas, Wynn Las Vegas can command among the highest room rates on the Las Vegas Strip and has as the most profitable clubs in the region. That's how he's able to have the most profitable property in Las Vegas despite others being in arguably better locations.

In Macau, Wynn Macau isn't the most profitable resort but it's among the top despite a location on the older Macau Peninsula. But Wynn caters to VIPs and as a result Wynn has been hit harder than competitors like Las Vegas Sands (NYSE:LVS) by the decline in VIP gambling. Third quarter Macau revenue was down 5.6% and with Macau's overall gaming revenue down 23.2% from a year ago in October the fourth quarter could see a major decline as well.

Wynn Resorts definitely owns among the best properties where it operates but the company is somewhat beholden to the market's growth to grow revenue and earnings. 

Wynn Everett is Wynn's expansion in the U.S. Image source: Wynn Resorts. 

The growth projects Wynn Resorts is building
What's positive for investors is that Wynn Resorts is investing in two major growth projects. The $4 billion Wynn Palace on Cotai will finally bring Wynn Resorts to Macau's fast growing casino region and a $1.6 billion resort in Boston will be started as soon as the dust clears from the recent gaming referendum that went in Wynn's favor.

Combined, these two new resorts could easily double Wynn's revenue and profits by 2017 when they're fully operational. That's good news considering the value investors are already getting in the stock.

What investors are paying for Wynn Resorts today
When I said earlier that gaming is about risk and reward a big part of the risk is what we're paying for a gaming stock. The cheaper stocks are trading for the lower the risk and vice versa.

Today, Wynn Resorts has an enterprise value of $22.8 billion to EBITDA of $1.92 billion over the last twelve months. That's an EV/EBITDA multiple of 11.9 and makes it the most expensive of the U.S. traded gaming companies with exposure to Macau.

But as I said above, Wynn could double its revenue and EBITDA in the next three years. That's worth paying a premium for, even if Wynn is more expensive than competitors.

I don't think Wynn Resorts' stock is a screaming buy today, especially with the backdrop of slowing revenue in Macau. But if you have a long-term horizon I think the opportunity for growth is too great to pass up. I think Wynn Resorts will not only outperform the market over the next five years, it'll outperform its rivals as well.