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The sun hasn't set on Macau yet. Photo by the author.

Good news for casino companies and their investors: The Chinese government is said to be furthering its support for Macau's tourism economy, which will hopefully help ease the decline in gambling revenue Macau has faced for the past year and a half. For companies such as Las Vegas Sands (NYSE:LVS)Wynn Resorts (NASDAQ:WYNN)MGM Resorts International (NYSE:MGM), and Melco Crown (NASDAQ:MLCO) that have each struggled during that time because of Chinese government restrictions, this could signal a comeback. Is it time to bet on these casino stocks again?

Beijing's signal that help might be on the way 
Most of Macau's pain over the past year and a half started when reports of money laundering and other illicit activity by VIP mainland Chinese citizens while they were gambling in Macau surfaced around April 2014. To curb this activity, the government in Beijing imposed restrictions on the amount of time a person can spend in Macau, where they can get their visas to go to Macau, and so on. These policies were very effective, and the VIP gambling revenue that made up much of Macau's economy withered. 

However, the Chinese government has shown signs of letting up on these restrictions. The Chinese government already started easing these restrictions in June by extending the time a person can stay in Macau and shortening the time the person has to stay out of Macau before going back. 

Now, the Chinese government may be ready to ease up even more. As reported in the South China Morning Post on Oct. 2, the Chinese government's lead member in Macau, Li Gang, said the Mainland Government is considering ways to support Macau's economy "in all aspects." He noted that the government will seek to introduce policies supporting the islands' tourism and continued development. 

Further support could come in multiple forms, but the most helpful would be continuing to ease restrictions on how long travelers can stay and how long they have to stay away before going back. Also, the government may allow more cities in Mainland China to give out individual visas, something that only select cities currently offer. Finally, the government is likely to help support continued efforts at diversifying the economy toward non-gambling entertainment. 

Is this the light at the end of the tunnel?
Shares of casino companies surged on the news, providing hope for investors that we have reached the bottom of Macau's drop and the comeback is coming. Yet it still seems pretty dark. 

While easing the restrictions seemed like it would be a win for gambling operations in Macau back in June, gambling revenue has continued to fall and was still down around 33% in September, year over year. However, month-over-month declines don't look nearly as gruesome as year-over-year comparisons, and there is a good chance that October gambling revenue will be higher than that of September with the "Golden Week" holiday Oct. 1-7 providing a tourism boost. This would finally break the 16-month decline streak. As losses taper, we could be seeing the light at the end of the tunnel. 

Time to bet again?
Is Macau really ever going to get back to where it was in April 2014? It's not likely -- not anytime soon, anyway. Over the past decade, it appears the economy was fueled by very high-net-worth individuals, and honestly, it now seems that a good deal of that activity was rather shady. But the government continues to clean up the industry and per the most recent statements believes Macau still holds potential as a vacation destination. 

Macau continues to evolve, offering more diversified entertainment to a mass-market audience. Consider how the transition away from gambling revenues and toward more diversified entertainment and tourism has helped Las Vegas' own resurgence in recent years. It won't be easy for Macau, and continuing to lose that VIP gambling revenue will make comparisons to the highs of early 2014 look grim. However as Macau transforms into a vacation destination, with more entertainment options and more support from Beijing, investors could still very well be rewarded long term -- but be prepared for more short-term pain.

Bradley Seth McNew owns shares of Las Vegas Sands. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.