Two years ago, the pundits were agog over the prospects of the former Portuguese enclave of Macau. Fueled by fast-earned money burning a whole into the collective pockets of the nouveau riche Chinese middle class, Macau surpassed the Las Vegas Strip as the world’s most lucrative casino market. But growth has stalled… not just in Macau but everywhere businesses depended on drunk sales reps blowing little Pugsley’s college fund at the blackjack table during a convention.

To stay in Vegas, you’d have to get to Vegas. And that costs money no-one is willing to spend right now. Accordingly, the supposedly recession-resistant vice stocks are taking it on the chin. Just yesterday [Thursday], we claimed our own 25% short profits share from the collapse of Las Vegas Sands (LVS) share price.

Today, I’d like to direct your attention to Wynn Resorts, Limited (NASDAQ:WYNN).

When it came to the subject of Macau, casino mogul Steve Wynn said on Wednesday: “The central government and the Macau government putting a crimp in or a slowdown in visitation was an attempt to give the community a chance to absorb the stuff that had been built.”

But that really makes no sense at all. Revenue growth has slowed as global recession and new travel restrictions on mainland Chinese tourists have hit all Macau casinos. Allowing “the community to absorb” new casinos doesn’t bring renminbi, yuan or dollars into the till. And the outlook that this may change is getting dimmer by the day:

Citi just downgraded Ctrip.com International, Ltd. (NASDAQ:CTRP), China’s premier travel service provider for hotel accommodations, airline tickets and packaged-tours in China. Analysts reduced it from a Buy to a Sell, slashing its price target from $53 to $18. We dipped below that price this morning.

If the outlook for the company who’d make a mint off shuttling Chinese gamblers to Macau is lagging… when China is lathering a good third of its currencies reserves into work-creation programs (infrastructure investment is nothing else!)… and when the companies responsible for China’s prosperity are closing at a record pace… it is time to bail.

WYNN is currently trading at around $30.15, down a hundred bucks from its 52-week high of $137.93, and uncomfortably close to its 52-week low of $28.06. Other than $3 LVS, WYNN still has a decent height to fall from.

I say short it at current levels, for gains of 15-20% by New Year’s. Cover at $33 should there be an upward bounce.

Source: After LVS, Wynn set to lose