China GamblingIf you thought Las Vegas was where the big gamblers went to play, you're behind the times. Vegas has been overtaken by the new hottest gaming location: Macau, China.

It wasn't always this way. Before Las Vegas Sands (LVS) opened Sands Macao in 2004, Stanley Ho had a monopoly over Macau's gaming. Corruption and mob activity were rampant. But when the government opened up the region to five new operators, the players started pouring in.

Las Vegas Sands made enough money in its first year there to pay for its first casino. (It's opening another major resort in the next few weeks.) Others soon followed -- Wynn Resorts (WYNN), Melco Crown (MPEL), Galaxy, and MGM Resorts (MGM) -- turning Macau into the center of the gambling universe.

In Vegas, They Play for Chump Change

High rollers are treated like royalty in Macau, as they are anywhere they go. But these VIP players bet big -- bigger than they do stateside. Baccarat's the big game in Macau, with the game generating in excess of 70% of the revenue in Macau casinos.

In 2011, Macau generated $33.5 billion in gaming revenue, making Las Vegas look like child's play.

Macau
Las Vegas
Atlantic City
2011 Growth
42.2%
3.5%
(7.0%)
2011 Gaming Revenue
$33.5 billion
$9.2 billion
$3.3 billion
Source: Regulatory data.

Today, Las Vegas is to Macau what Atlantic City is to Las Vegas. And at the current rate of growth, Macau will soon generate four times as much gaming revenue as the old gaming capital of the world very soon.

What Happens in Macau Doesn't Just Stay in Macau

An improving economy in China, along with development in other parts of Asia, has given an immense population more disposable money to gamble with. And gamble they do.

Mini Macaus are sprouting elsewhere in Asia. Singapore, which has just two casinos, is anticipating as much as $7 billion in gaming revenue in 2012, just three years after casinos opened there. The Philippines, Vietnam, and Japan are also looking to cash in on the trend.

If Las Vegas doesn't watch out, it may slip to the third, fourth, or maybe even fifth gambling hot spot in the world in no time.

What's Next for Las Vegas?

If Macau is the new gaming hot spot, what does that mean for Las Vegas? The glitz and glamor have worn off a bit, but the city has been on the mend since the economy started recovering. Visitors are coming back in droves, and even if they aren't gambling like they used to, they're willing to spend on rooms, shopping, pool parties, and bottle service at nightclubs.

But if Las Vegas doesn't watch it, it could become the next Atlantic City. The gambling spot just south of New York on New Jersey's coast may now be best known as a giant billboard for Donald Trump rather than a great place to gamble. The city's casinos have become run-down and revenue has suffered as a result.

Las Vegas, it was a nice run on the top. But it looks like your luck is running out.

Motley Fool contributor Travis Hoium does not have a position in any company mentioned.

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Abdul

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April 10 2012 at 5:29 PM Report abuse rate up rate down Reply
bill

las vegas started to go down hill for joe six pack and his wife,alse ma/pa kettle.when the mob ran vages it was ok for common people,then the big crooks took over i meen corp exec's.we started to go there in the 70's twice a year for a week,then once a year,then down to 5 days.we have been there twice in the last 12 years.we go to mississippi.do your own thing

April 05 2012 at 1:00 PM Report abuse rate up rate down Reply
IRVING

New Jersey contiues to make a tremendous mistake by limiting it's gaming industry to one city while neighboring states open casinos any where in their borders

April 02 2012 at 10:44 AM Report abuse rate up rate down Reply
bergenlv

Last time I checked las vegas was still in the united states of America, Spend your money in the U.S. Las Vegas is nice and clean. Las Vegas has all modern new hotels, City Center was just completed, all new construction and great entertainment Las Vegas has a lot to offer. If gambling is not your thing than just enjoy great weather and visit Hoover Dam and RED CANYON....

March 31 2012 at 6:32 PM Report abuse rate up rate down Reply
Win

No one is going to fly 14 hours on a plane to gamble unless you have your own private jet. Macau is a completely different market than Las Vegas. Plus, China has 4X the USA population. And considering that the Chinese are not as smart as Americans its like 5X the population than the USA when it comes to gambling.

What America has to do is start making babies to increase its population to the 1 billion mark. China already has 1.3 billion.

March 31 2012 at 11:56 AM Report abuse -1 rate up rate down Reply
Kurt

This just kinda hit me like a ton of (brics!) Many nations have stopped using American money in trade! This is just more proof that America is dying! Our national decline really started gathering speed when we passed nafta and followed it up with giving China mfn status! We produce hardly anything anymore other than lawyers, public employees and welfare dependents. I loath to think what this country will be like in another 20 years! Well at least the stock market is going through the roof...imagine that!!!

March 31 2012 at 10:44 AM Report abuse rate up rate down Reply
Ray Scarth

You have to follow the money, the Chinese disposable income is rising and the americans' disposable income is falling. Yeah, you could say Las vegas had a good run, so did America! Welcome to the New world order!

March 31 2012 at 9:17 AM Report abuse rate up rate down Reply