Source: Las Vegas Sands

Gambling is well known for being a particularly lucrative industry, after all, the house always wins in the long term. With this in mind, let's look at three major industry players -- Las Vegas Sands (NYSE:LVS), Wynn Resorts (NASDAQ:WYNN), and Melco Crown (NASDAQ:MLCO) -- to find out which one may be the best choice for investors right now.

The right time to buy
These three casino operators have a sizable presence in Macau, a special administrative region in China where gambling is legal. This privileged position in one of the most exciting gambling markets in the world has produced extraordinary benefits for these companies over the years, and chances are they will continue profiting from growing gambling demand in China over the decades to come.

On the other hand, gambling revenues in Macau have declined over the past several months, creating a big drag on performance. Chinese authorities are imposing a series of restrictions on VIP Macau gamblers to fight corruption, and political protests in Hong Kong are hurting Chinese tourism in general.

According to official statistics, gambling revenues in Macau declined by a big 23% in October, an acceleration versus am 11.7% decline during September. Accumulated revenues in the first 10 months of the year are barely in positive territory, with a 2.3% increase, but the overall trend is clearly not looking good.

There is no sign of stabilization so far, and it's hard to tell how long it may take for Macau to turn around, so investors in casinos with big exposure to the region need to be willing to tolerate considerable volatility in the middle term.

However, uncertainty usually creates opportunity, and chances are this will be the case with Macau casino stocks.

Gambling and entertainment demand tends to move in line with economic growth, as consumers tend to spend an increasing share of their budget on these activities when disposable income grows. While economic growth in China has been disappointing lately, the rise of the Chinese middle class is a long-term trend that won't get derailed because of a few quarters of short-term economic volatility.

The contenders
Las Vegas Sands also has operations in the U.S. and Singapore, but the company generates most of its profits from Macau. Not only that, but Las Vegas Sands is also a market leader in the region; management estimates that it has a market share of 56% among gambling operators in Macau, and its hotel inventory exceeds the other five gambling operators combined.

Source: Las Vegas Sands.

The company plans to have more than 12,600 hotel rooms and apartments in Macau by 2017, giving it a market share of 44% of available rooms among gambling operators by that year. Besides, Las Vegas Sands is leveraging its experience and reputation in Asia to explore expansion opportunities in Japan and South Korea.

Wynn Resorts operates in Macau and Las Vegas. The company's Macau resort is a destination casino with two luxury hotel towers offering a total of 1,008 rooms and approximately 280,000 square feet of casino space. In Las Vegas, the company operates two luxury hotel towers with a total of 4,748 rooms and approximately 186,000 square feet of casino space.

Roughly 68% of Wynn's Revenues came from Macau during the third quarter, and the company is particularly well positioned in the VIP gambling segment.

Melco Crown is a pure play on Asia. The company currently makes all of its revenues from Macau, where City of Dreams is a major profit contributor. Melco Crown also operates the smaller Altira Macau and Mocha Clubs, the largest non-casino-based operation of electronic-gambling machines in Macau.

The company plans to inaugurate its new Studio City property in Macau by mid-2015, and the inauguration of City of Dreams Manila in the Philippines next month will be an initial step toward international expansion for Melco Crown.

When comparing valuation ratios for the three casinos, Las Vegas Sands is cheaper than Melco Crown and Wynn Resorts in terms of both P/E and PEG -- price/earnings to growth -- ratios.  Dividends are pointing in the same direction: Las Vegas Sands has the biggest dividend yield in the group.

Wall Street analysts are on average forecasting higher growth rates for Las Vegas Sands than for the other Macau casinos. Although estimates are always fallible and subject to revision, the company's growth plans are clearly promising.

 CompanyForward P/EPEGDividend Yield5-Year Estimated Earnings Growth
Las Vegas Sands 15.4 1.3 3.4% 13.5%
Wynn Resorts 21.4 2.1 3.3% 10.6%
Melco Crown 15.7 1.5 1.3% 11.7%

Data source: FinViiz.

Temporary weakness seems to be providing a buying opportunity for long-term investors in Macau casinos. Considering Las Vegas Sands' leadership position in that exciting market, ambitious growth prospects, and attractive valuation levels, the company looks like a smart bet.