Las Vegas may be the original icon of gambling excess, but it's far from the biggest gambling market in the world today. That title goes to Macau, which had $37.1 billion in gaming revenue over the past year, compared to $6.5 billion on the Las Vegas Strip. 

Macau's scale is staggering in the gambling market, but spending in other areas of resorts doesn't scale the same way in Macau as in Las Vegas. Gamblers don't spend much at all on rooms or restaurants in Macau, segments Las Vegas has turned into the profit driver for the city. Where the money comes from for both cities can tell us a lot as investors. 

Macau's skyline from the water.

Image source: Getty Images.

Where the money comes from

The starkest contrast between Macau and Las Vegas comes from the casinos' portion of overall resort revenue. In Macau, most Las Vegas Sands (LVS -2.29%) and Wynn Resorts (WYNN -3.51%) properties are generating over 80% of their revenue on the casino floor. In Las Vegas, less than a quarter of revenue is coming from the casino. Below is the percentage of total resort revenue coming from each segment for some of the biggest resorts in both regions. 

Resort Casino Food and Beverage Rooms Other
Venetian Macao 80.4% 6.8% 2.5% 10.3%
Sands Cotai Central 74.5% 4.7% 15.8% 5%
Wynn Palace 84.6% n/a 6.6% 8.8%
Wynn Macau 87.1% n/a 5% 7.9%
Venetian Las Vegas 23.2% 15.8% 36.4% 24.6%
Wynn Las Vegas 23% 38.7% 26.8% 11.5%

Source: Company earnings reports. All figures as of most recent quarter.

As far as Las Vegas is behind in gambling, it's ahead in these other areas. Last quarter, the Venetian Las Vegas generated $138 million from hotel rooms and $60 million from food and beverage compared to $58 million and $21 million respectively at Venetian Macao. Wynn Palace generated $40.7 million from rooms, compared to $118.3 million at Wynn Las Vegas.

There are typically fewer hotel rooms in Macau resorts, but that wouldn't be the case if there were enough demand for more rooms. Las Vegas is simply built to be a more diverse revenue generator than Macau. 

Macau may have more upside

Las Vegas hasn't always been so nongaming focused. Resorts have done a good job maximizing revenue from nongaming sources over the past two decades, building nightclubs and large hotels to house guests. But Macau could eventually catch up. 

The Macau government has limited the number of table games allowed in casinos and is encouraging newer resorts to focus more elsewhere. This is giving companies a reason to maximize revenue in restaurants, theaters, and other places around resorts. Wynn Palace, for example, has more than a dozen restaurants and dozens of shops, just like Wynn Las Vegas. It's trying to generate more nongaming revenue, while keeping in mind that the casino floor is the real cash cow for the business. 

If Macau can increase the revenue it generates from sources other than gaming, it would be a nice diversification for the region and bring less reliance on monthly gaming volumes for casino stocks

Know where you're placing bets

Owning casino stocks isn't the same all over the world. In Macau, investors are betting almost entirely on levels with very little other than gaming. In Las Vegas, the gaming floor gets a lot of attention, but it's hotels, nightclubs, and conventions that really drive profits. 

As a result, when Macau falters, Las Vegas Sands, Wynn Resorts, and Melco Resorts & Entertainment (MLCO -4.40%) feel it most. MGM Resorts International (MGM -5.01%), which only has two resorts in Macau and is much more exposed to Las Vegas, is rooting for people to visit Las Vegas, whether they gamble or not.