Telsey Advisory Group recently initiated coverage of casino stocks and released a new report discussing the current state of the industry. Analyst David Katz sees a major divergence in the casino business these days, and believes that investors should make sure to be on the winning side of the trade.

Macau Lacks A Catalyst

The bad news for casino investors continues to be Macau. Katz sees Wynn Resorts Ltd WYNN 4.61% as the biggest loser in Macau.

Despite calling the company “the most effective operator in the industry,” Katz sees Wynn’s positioning as the premium/VIP destination in Macau as particularly vulnerable during the current downturn.

Katz argues that Las Vegas Sands Corp LVS 2.8% and MGM Resorts International MGM 1.89% have less exposure to Macau and generate a higher percentage of their business from the mass market.

U.S. Names Are Strong

While Macau’s woes continue, U.S. regional gaming is…

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