24/7 Wall St.

Gambling revenue growth on the Chinese island of Macau fell to its lowest level in 15 months in January, rising just 7% to $3.6 billion. The drop is attributed to slowing economic growth in China, and the even worse news for casino operators is that high-rollers (called VIPs) who account for about two-thirds of Macau’s revenues are also keeping their hands on their wallets.

The impact of the report from Macau’s gambling commission sent shares of Las Vegas Sands Inc.’s (NYSE: LVS) Sands China Ltd. shares down 7.5% in Hong Kong trading. That’s the biggest one day drop since October 2011 according to a report at Bloomberg News.

In the U.S., casinos with significant exposure to Macau are also taking a hit. Las Vegas Sands is down the least, at about 1.3% at the noon hour Tuesday. MGM Resorts International (NYSE: MGM) is down nearly 2%, Wynn Resorts Ltd. (NASDAQ: WYNN) is down about 2.6%, and Melco Crown Entertainment Ltd. (NASDAQ: MPEL) is down about 4.5%.

In 2013 Macau’s gambling revenues rose 19% to $45.2 billion, about 7-times the revenues of the Las Vegas strip. The casino stocks were re-evaluated in early January and consensus price targets were lifted at Melco Crown from $41.75 to around $46.70. Wynn’s price target was raised from $182.40 to about $223.50, while the Las Vegas Sands target rose from around $79 to $86.

Valuations based on forward earnings have also moderated somewhat, with Melco Crown’s forward multiple dropping from around 24 to 22, Sands’ multiple sliding from around 21 to around 17, and Wynn’s forward P/E slipping from around 26 to around 23. All are still pretty richly valued, even after the updates.

Whether the casino stocks can maintain these levels depends a lot on the outlook for the Chinese economy. Right now, in the middle of the New Year celebrations, may not be the best time to gauge how the Macau casinos will fare beyond February. But starting to pay attention now is not too soon.