With casinos in the world's gambling capital of Macao -- the only place in China where it's legal to gamble -- still weighed down by the COVID-19 pandemic, resort operators like Las Vegas Sands (LVS 2.05%) with outsized exposure to the enclave carry more risk than their peers.

In contrast, some analysts see the city of Las Vegas as the better bet for a strong comeback, and with MGM Resorts (MGM 0.35%) being the biggest player on the Strip with a lucky 13 venues, it could offer investors better odds for long-term gains.

Yet Las Vegas is no safe bet for a revival. It's facing many of the same problems Macao has. But MGM still has a number of aces up its sleeve that make it the better casino stock.

Casino floor with BetMGM retail sportsbook sign

Image source: MGM Resorts.

Geographic diversity

While MGM has a large concentration of casinos in Las Vegas, it also owns properties around the U.S. that give it greater diversity.

From the Borgata in Atlantic City and the MGM Springfield in Massachusetts to National Harbor in Baltimore and MGM Grand Detroit, the resort leader is spread across the country in some of the biggest regional markets. It also owns hotels, dining facilities, retail establishments, convention centers, and golf courses.

It does have exposure to China, too, through its 56% ownership stake in MGM China, but it represents only about 10% of revenue and 24% of adjusted EBITDAR (EBITDA plus rent/restructuring). In contrast, Sands gets 64% of its revenue and 60% of adjusted EBITDAR from Macao. Wynn Resorts (WYNN 1.70%) is even more reliant upon China than Sands.

Sports betting is the real opportunity

MGM Resorts arguably saw the potential for sports betting before most others and set itself up to capitalize on its legalization earlier than most.

For example, its acquisition of Empire Casino in New York primes it to launch in the largest sports market as soon as the state authorizes it. That's why its BetMGM sports betting app attached to the Borgata is the third-largest sportsbook in New Jersey.

It generated $5.6 million in onsite sports wagering revenue in 2020 and $25.9 million via online wagers, behind only The Meadowlands racetrack, which partnered with FanDuel and generated a combined $206.5 million in revenue last year, and the Resorts and DraftKings (DKNG 1.08%) duo, which generated $100.9 million.

More states are legalizing sports wagering, giving MGM a large lead over its rivals. Las Vegas Sands was notoriously opposed to sports betting due to moral objections by its late founder Sheldon Adelson, but now it is contemplating entering into the market. It may be too little, too late, however.

Similarly, Wynn Resorts was late to sports betting, but its WynnBet app has a presence in two states, has secured access in five others, and plans on adding more.

Risks still abound

While analysts are looking for the Las Vegas Strip to rebound strongly later this year and continue into next, which is what drives their view that MGM Resorts is the best casino bet, the strict social distancing guidelines and reduced capacities required to reopen casinos could keep consumers away from them just as much as is occurring in Macao.

And as strong as MGM is with BetMGM, Flutter Entertainment's (FLUT 0.47%) FanDuel and DraftKings are far ahead of anyone, owning about three-quarters of the U.S. sports betting market nationally.

Still, MGM Resorts has put together the pieces for a sports betting empire of its own for when more states open up, not to mention that online casino gaming could become of critical importance until the coronavirus pandemic is once and for all behind us.

It's for these reasons investors should forget Las Vegas Sands and maybe not go all-in, but place their bets on, the better casino -- MGM Resorts.