This Gambling Stock Will Soar Thanks to Expansion Plans in Macau and Boston

This week, the International Monetary Fund (IMF) announced that Chinese economic growth is expected to slow from 6.2% in 2019 down to 5.5% by 2024.

With the world's second-largest economy sliding and a trade war escalating with the United States, investors are left wondering what upside exists in China right now.

One of the best backdoor "recovery" plays in China isn't found in e-commerce or the nation's booming agricultural sectors... Instead, you can stay at home in the U.S. with one of the world's biggest powerhouse gambling stocks.

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Here at Money Morning, our readers have had a lot of success with gambling stocks since the U.S. Supreme Court struck down a federal ban on state licensing for casinos and sportsbooks.

We saw a triple-digit gain last summer when we recommended Dover Downs Gaming & Entertainment Inc. (NYSE: DDE) just before a Rhode Island casino operator acquired it.

To determine the best gambling stocks, both domestic and foreign, we tap into the Money Morning Stock VQScore™ system.

This proprietary platform tracks 1,500 of the most profitable stocks and assigns each of them a score.

A company's VQScore signals how likely it is that a stock breakout is coming. The higher, the better.

Today, we're unveiling a global gambling stock to buy with one of our highest VQScores.

First, we'll talk about recent developments in China's gaming industry and how to play those developments.

Then, we'll discuss the one stock that is poised to surge despite China's shaky VIP concerns.

Let's get started...

China's Gambling Industry Is About to Bounce Back

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Las Vegas still remains the U.S. destination for American gamblers.

In China, however, Macau is the go-to gambling hub.

Even though Sin City has a bigger population, more visitors, and a higher per-visitor gambling budget, Macau's annual gaming revenue dwarfs that of Las Vegas despite having nearly half the operating casinos.

Macau gambling faced early pressures to start the year. But revenue increased by 1.8% in May to $3.2 billion for the month. That increase, according to the nation's Gaming Inspection & Coordination Bureau, followed two months of declines in March and April.

Macau gambling has been on the rise in recent years. Last year alone, the Macau sector jumped 14% year over year to reach $37.6 billion in revenue.

However, the big challenge is that high rollers aren't betting the way that they used to...

VIP revenue declined at major properties sharply. Gaming promoters and trade association members have blamed mainly the ongoing trade war for the disappearance of high rollers, which comprise a significant chunk of revenue for the casinos in the region.

It's worth noting, however, that with economic stimulus likely on the horizon and support from the nation's central bank, Macau should start to see an uptick in those visitors as we move into the second half of the year. Also, the IMF has recommended that the region create incentives for the operating casinos to bolster tourism rather than relying on VIP revenue.

This Is the Macau Gambling Stock to Buy

Investors should start to purchase Wynn Resorts Ltd. (NASDAQ: WYNN).

Two key trends are favorable for the company through the rest of the year.

First, China's economic policy.

Yes, Macau gambling has been under pressure. But the flattening of China's economic prospects will likely fuel an uptick in economic stimulus, which will provide the fuel necessary to boost Macau's second half earnings in 2019.

VIP gambling revenue at Wynn's two primary Macau properties fell sharply during the first quarter, which led to 18% and 40.3% year over year declines.

However, Wynn anticipates that the VIP market will recover in the coming months despite increased competition from resorts in places like Vietnam.

But the real news isn't in China.

It's in Boston...

Why Wynn Is Expanding to Boston

Wynn is about to complete the last detail of its new Encore Boston Harbor. This resort is the firm's expansion in the United States outside of the Las Vegas market.

However, despite all the anticipation, the news around its Boston expansion has been mainly negative. That's because the casino operator was forced to pay a $35 million fine to the Massachusetts Gaming Commission after failing to disclose sexual misconduct allegations against the company's founder, Steven Wynn, who resigned as CEO last year.

But that negative sentiment is actually good news for investors looking to buy the stock at cheap levels...

The $2.6 billion project, which received a favorable tax package, is set to open later this month, and it should provide a solid boost to the firm's bottom line.

The Encore features 670 rooms and will be near a metro population of 4.7 million people and one of the busiest airports on the East Coast.

This new project also alleviates Wall Street's ongoing concerns about the company's domestic growth plans over the next few years. Wynn pays an attractive 3.66% dividend right now, which is a huge premium to the current U.S. 10-year Treasury at 2.09%.

Of course, the most important number around Wynn is its stellar VQScore of 4.75.

This figure signals that Wynn Resorts is a "Strong Buy."

We project that the stock has upside of $170 per share over the next 12 months as China's gambling markets recover and the firm adds what could be an additional $300 million in EBITDA thanks to its new Boston project.

That price target represents 55% upside from Wednesday's closing price.

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