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Macau’s casino stocks have gotten a break from their string of bad luck. But the odds are still stacked against them.

Shares of the five major casino operators listed in Hong Kong— Wynn Macau, WYNMY 0.00 % MGM China, Sands China, Galaxy Entertainment and SJM—have risen an average 10% over the last two trading sessions. There are two pieces of news driving the rally.

First, tourist arrivals into Macau have risen during China’s weeklong national holiday, which is still under way. Over the first four days of the holiday, total arrivals rose 1.9% from a year earlier, and visits from mainland China were up 7.8%, according to Macau government statistics.

Second, an official from Beijing’s representative office in Macau was widely quoted in local media saying the central government is considering unspecified measures to support Macau’s economy.

Shares in the casino operators were due for a bounce. Even after the rally, they are down an average 47% so far this year. Short interest in the stocks has also been intense, laying the ground for a short squeeze on any positive news. Bets against Wynn Macau, for instance, peaked on September 22 at 51% of total trading volume in the stock.

Nonetheless, investors should stay cautious on the outlook for Macau’s casinos. None of the news driving the relief rally is as good as it first seems.

Rising tourist arrivals are welcome, but they don’t guarantee that gambling revenues will follow suit. The bigger problem facing Macau is a lack of high-rollers, who have been scared away by a weak Chinese economy and the unrelenting corruption crackdown. In the first eight months of the year, total visitor arrivals were down 3.2% from a year earlier, but total gambling revenue was down by 37%. Last year, visitor arrivals were actually up 7.5%, and gambling revenue still fell.

Promised support from China isn’t a magic elixir, either. Beijing’s wider agenda has been to push the semiautonomous territory to diversify away from gambling and toward other drivers such as general tourism and entertainment. Whatever measures the central government is considering, they are unlikely to depart from this policy. That means the direct benefit to casino operators will be limited.

What’s more, Beijing isn’t about to relax the anticorruption drive. Concern over capital outflows may actually lead to intensified scrutiny of Macau’s gambling industry, which has been used as a conduit for wealthy Chinese to take money out of China.

Despite the sharp declines so far this year, valuations still aren’t compelling. The five Hong Kong-listed companies are trading at an average 15.4 times forward earnings, only a bit below their five-year average of 16.5 times, according to FactSet.

A couple of good days doesn’t mean the losing streak is over. In Macau, it still doesn’t pay to bet with the house.

Write to Aaron Back at This e-mail address is being protected from spambots. You need JavaScript enabled to view it