The gambling industry has been tumultuous over the past year. Issues in Macau devastated the companies with the largest percentage of overall sales from there, while other countries have debated whether to legalize gambling, and we've seen consolidations and bankruptcy filings. Las Vegas Sands (NYSE:LVS) , Wynn Resorts,and Melco Crown were the companies hit hardest by Macau's downturn, while MGM Resorts International (NYSE:MGM) and other Las Vegas-focused companies were able to see new growth in recent quarters. 

For the rest of 2015 and over the next few years, there are some great opportunities that all of this shifting has created, as well as some pitfalls to avoid. Here is the state of the gambling industry now.

Asian expansion hasn't worked out as well as hoped
Many have long waited to hear about a bill legalizing casinos in Japan. The bill was talked about at length last year and finally was brought to the Japanese Diet, the nation's congress, during this summer session. However, the sponsoring party announced in early August that it would stop pushing the bill this year as it needed to focus on higher-priority legislation. Analysts believe Japan could be one of the top markets in the world if gambling were legalized, but as of now this doesn't look like something to bet on. 

The story is the same elsewhere in Asia, in places such as South Korea, Thailand, the Philippines, and other countries where the fortune of Macau has spurred conversation over which spot in Asia could be the next gambling mecca. While none of these locations have shown any signs yet of having nearly the potential of Macau, Singapore continues to be an area that has provided diversification for Las Vegas Sands, the only of these companies with a license to operate there (the other company with a license there being Malaysian gambling company Genting). But Singapore probably isn't a high-growth prospect going forward. In fact, in the most recent quarter, LVS's Singapore operations took a hit, with revenue and EBITDA down 11% and 13% year over year, respectively. Still, the area does provide a great diversification for Las Vegas Sands and stable income. 

Las Vegas continues to evolve
Following the financial crisis in 2008 that left Las Vegas' gambling economy depressed, the city has now put its bets on a more diversified entertainment and tourism hub where gambling makes up only about a third of the total tourism economy. Live shows, food and beverage, shopping, and other forms of entertainment now make up the bulk of revenue the companies there bring in. Convention usage is another segment that continues to grow in Vegas, as many organizations and businesses hold meetings in Vegas, entertainers and music festivals hold concerts there, and even sports teams use Vegas as a meeting point for national competitions.

MGM is currently building what will be Las Vegas' biggest arena when it opens next year, and it might even become home to a new National Hockey League team. The group leading the efforts to bring an NHL team to Vegas announced on Aug. 22 that it has passed into the final stages of the application process with the NHL's governing body, and if a team is finalized, it could play as early as the 2017-18 season.  

Don't fold on Macau just yet
Macau continues to see year-over-year declines in gambling revenue. However, there does look to be some easing on those losses. In late June, the Chinese government announced eased restrictions on tourists going to Macau. The mainland Chinese government set restrictions on Chinese citizens visiting Macau in 2014, limiting their stay to just one five-day trip during a 60-day period. The recently eased restrictions allow visitors to stay seven days and decreases the frequency restriction to once every 30 days instead of 60 days. 

Other than more lax restrictions, there are easing gambling revenue losses as well. Macau's July gross gambling revenue dropped 35% from July 2014, but that's still an improvement from the 49% year-over-year drop in February. To be fair, this good news of slightly better losses is more about less-harsh year-over-year comparisons than it is about rising revenue, as July of this year is now compared with a year-over-year time after the Chinese government started to restrict activity in Macau, as opposed to February 2014, which was Macau's most profitable month ever, making this February look so bad.

Still, that means that as these losses bottom out in Macau, we'll be left with companies that have been forced to operate extra efficiently, and ones that can continue to grow slowly over the long term as the Macau economy evolves to a more tourism- and entertainment-focused economy much like Las Vegas and with plenty of long-term potential. 

Companies with promise
Other than Caesars Entertainment, which continues to look like a black hole that will only bring investors more misery, no company's stock seems to be too bad right now, as the recent price decreases over the past year have led to a lot of potential value plays. But while many of the companies' stocks look good from a valuation standpoint, the best bets for future growth still seem to be Las Vegas Sands and MGM Resorts. 

  • Las Vegas Sands: For the potential resurgence in Macau and more growth around Asia, Las Vegas Sands is the clear winner. LVS already has the most properties, by far the most hotel rooms, and the most diversified visitor base in Macau Thanks to cost efficiencies and a focus on the mass market, LVS is still the most efficient operator in Macau. If Macau's downward pressure continues to ease, LVS looks to be in the best place to take advantage of future regrowth. Las Vegas Sands also is one of the best performing companies by earnings growth, is one of the least expensive by price to earnings, and offers a nearly 5% dividend yield.
  • MGM Resorts:While LVS is the best bet on Asia, MGM continues to look like the best bet on Las Vegas. With about 27% of all hotel rooms there and more properties than any other group, housing many of the most important entertainment venues, MGM looks to be a long-term win for the continued evolution of Las Vegas' tourism economy, especially when its new arena is completed next year. 

Bradley Seth McNew owns shares of Las Vegas Sands. The Motley Fool is short Caesars Entertainment. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.