Steve Wynn dogged by pullback in China

Steve Wynn isn't known to betray worries about his casino empire. But these days, it's hard to deny that his business in China has been a real dog.

Wynn Resorts Chairman and CEO Steve Wynn.
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On Tuesday night's investor call for Wynn Resorts, the outspoken CEO took an unusually cautious stance on Macau, a Chinese gambling mecca. Wynn called out the recent turmoil in neighboring Hong Kong, smoking restrictions and a crackdown on indulgences by the Chinese government. He didn't venture to predict how soon things might get better.

"It's worse in October than it was before October. So if you're asking what is the nadir of our experience? It is currently," Wynn said. At one point on the call Wynn's dog starting barking audibly—perhaps sharing some of the tycoon's frustration.

Somewhat surprisingly, shares of the Macau units of major casino operators rallied on the news. Hong Kong-listed Wynn Macau rose 4.5 percent in Wednesday's session while Sands China jumped 5.3 percent and MGM China holdings gained 5.4 percent.

Unfortunately, there's little reason to expect further gains anytime soon. After a long string of healthy gains, gaming revenue in Macau fell every month between June and September, with the declines getting gradually steeper, according to Chinese government data. Going into the final months of the year, the comparisons will get even tougher: In 2013, revenue rose 32 percent in October and 21 percent in November.

Particularly worrisome is the crackdown on luxury spending and indulgences, which appears to be having a widespread impact in China. Wynn pointed out that the likes of Chanel and Cartier are noticing the same trends he is. Even Coach, which sells goods at a lower price point, reported a slowdown in its quarterly results this week.

Read MoreWhat slowdown? Rich Chinese thirst forliquid luxury

That's not to say Wynn can't outperform its rivals. As Wells Fargo analyst Cameron McKnight points out, Wynn continues to gain share in the non-VIP segment of the business and is building a new casino project on Cotai, a stretch of reclaimed land in Macau.

Emails to Wynn Resorts seeking comment were not returned.

Wynn himself hasn't changed his long-term view on China. "I don't know whether it's a squall or we're in the rainy season or how long it will last, but we're still very, very bullish on Macau," he said on the call. Asked a few weeks ago about a slowdown in China, he recently said he was "more scared" about the U.S. than the communist country.

Read MoreSteve Wynn: I'm 'more scared' about US than China

The question is when investors should pick an entry point. Shares of Wynn Macau, in which Wynn Resorts has a majority stake, have fallen 20 percent so far this year. But the stock still trades at 15.8 times earnings before interest, taxes, depreciation, and amortization. That doesn't look all that cheap, especially with no sign of Macau improving anytime soon. There may be a better opportunity in the future to bet on Wynn.