Slowing growth in developed markets is hardly a new story, and the gambling industry is no exception. In October, Las Vegas gambling revenue dipped slightly, after a period of recovery following the recession. MGM (NYSE: MGM), Wynn (NASDAQ: WYNN) and Caesars (NASDAQ: CZR) all felt the pinch.

While gambling revenue in Las Vegas seems fairly dependent on the consumer spending environment, Macao is growing regardless of what's going on in macro-economic terms. As such, major casino operators may be best off focusing their efforts on Macao or at least branching out from Las Vegas.

Strip slowing
October wasn't a particularly strong month for casino operators. Overall, Nevada's gambling revenue was down 2.6% for the month. The decline was led by the Strip, which saw revenue drop 5% year-over-year to $551 million. Downtown Las Vegas casinos reported a 3% drop, while Reno, Nev.'s casinos did a little better with a 1% decline.

The decline followed fairly strong showings in August and September, making the comparison a little more difficult. August statewide wins increased by 11.1%, and for September posted a 7.4% rise. According to one analyst, the comparison was made even more difficult due to some of September's wins being rolled over to October last year. Still, Nevada and Las Vegas are up for the year.

Perhaps because of slowing growth in Nevada, several US casino operators are looking to branch out. Twenty three states now have legalized commercial casinos, which may provide companies like Wynn Resorts and MGM Resorts with opportunities for growth.

According to the American Gaming Association, overall revenue from commercial casinos rose 4.8% last year. The Northeast seems to be the hot-spot at the moment, with operators bidding for locations in Maryland and New York.

Operators are also looking toward online gambling as a means to sustain growth. Three states have now legalized online gambling, New Jersey being the most recent one to join. Being the most populous state to have legalized virtual casinos, the industry is buzzing with speculation as to how this will affect brick-and-mortar casinos.

Steve Wynn, for one, seems rather uninterested in the whole idea. MGM CEO Jim Murren, on the other hand, has been pursuing the opportunity quite aggressively, partnering up with online gambling giant Bwin.

Macao growing
While many US casino operators are looking for domestic growth opportunities, the real money seems to be in Macao, which is still growing like a weed. Wynn still makes most of its revenue from its US operations, but Macao is growing considerably faster with a 9.6% increase in net revenue for the third quarter. Las Vegas operations grew by only 1.1%. Adjusted property earnings before interest, taxes, depreciation, and amortization in Macao increased by a healthy 12.6%.

MGM China is growing even faster. The company posted a 22% increase in net revenue for the third quarter, with adjusted EBITDA up an impressive 25%. Now working on a new hotel, MGM China hopes to complete its MGM Cotai resort by 2016. Excluding capitalized interest and land, the project is expected to cost around $2.6 billion. The investment seems like a good indication of the company's solid position in China at the moment.

Caesars Entertainment is the only major casino operator without activities in Macao, and it shows as the company is clearly suffering. Third-quarter results were fairly grim, with casino revenue down 7.1%. For the quarter, the company lost around $760 million, down from the roughly $500 million loss in the same quarter last year. The company faced another setback recently, with a partnership for a Massachusetts casino breaking down due to regulatory concerns.

The bottom line
With growth slowing on the strip, casino operators are looking for new ways to make money. Domestically, there are several opportunities, with a fair number of states now having legalized gambling. Also, online gambling may provide opportunities for the companies that can get into it on time. However, the real money seems to be in Macao, where companies are still growing the top and bottom lines at a rapid pace.