As Americans, we usually think of Las Vegas as the place to go to gamble -- but compared to Macau, Vegas is just a drop in the gaming bucket.

In this segment from the Industry Focus: Consumer Goods podcast, Sean O'Reilly and Vincent Shen talk about just how huge of a gambling hot spot the Chinese territory is, how the People's Republic of China intentionally set it up to be just that, and which games the city is best known for.

A full transcript follows the video.

This podcast was recorded on April 12, 2016.

Sean O'Reilly: We're not talking broadly about gaming or anything, we're actually just talking about Macau.

Vincent Shen: Yes.

O'Reilly: Now, that being said, you're talking about the largest gambling mecca on the planet Earth. What were you saying, even after the drop they've experienced in the last year ...

Shen: Even now, it's multiple times the size of Las Vegas, the Strip. And, as much as, within the U.S., I think a lot of people think of ...

O'Reilly: Well, it's very easy to go to Vegas and get sensory overload. Now, multiply that by five, and that's Macau. (laughs) 

Shen: Or seven, exactly. Definitely a gambling paradise. These days, they've begun this shift, where the Chinese government basically said, "You need to diversify your economy a little bit and bring in more family entertainment," and things along those lines. Previously, though, it was very much so a gambling-focused economy and market.

O'Reilly: So, how much money trades hands in Macau? Have you come across that at all?

Shen: Sure. Just to give listeners a little bit of context, we know that since about June 2014, Macau has struggled. And that was after 10-plus years of incredible growth. I think Macau surpassed Vegas as the largest gambling enclave or market, in about 2007. And since then, the growth just kept ramping up, until 2014. Then there was the government crackdowns on corruption and luxury spending, which have sent the market, I think it's 22 straight months now of year-over-year declines in gaming revenue in Macau.

O'Reilly: Wow!

Shen: So, to give you an idea, in 2010, the overall total gaming revenue was about 188.3 billion Macanese patacas. The exchange rate is about 8 patacas to about $1. So, that's about $23.5 billion. 2013, it peaked at about $45 billion, and in 2015, it's fallen back down to about $29 billion. So, you can see how significant that is. The amount that they've lost in terms of gaming revenue in the last two years is far more than Vegas sees in an entire year. Just how much they've lost.

O'Reilly: Right. You've never been, have you? I went to Hong Kong when I was in China in 2009. Have you ever been to Macau?

Shen: You're not too far across the water, but no. I was in Singapore, where I was able to see the Marina Bay Sands and what Las Vegas Sands (NYSE:LVS) has there. But unfortunately, I did not make it to Macau. That would have been an incredible experience, even now, especially because -- and this is another reason I want to talk about Macau today -- there are some huge new luxury resorts coming out from several of the major players there, including MGM (NYSE:MGM), Las Vegas Sands, who we'll be talking about, Wynn Resorts (NASDAQ:WYNN), and others.

O'Reilly: Yeah. Before we move on, I want to talk about -- it was always interesting to me how Las Vegas was this, like, desert stopover thing that just popped up after World War II, and of course, the Mafia got involved and all that good stuff. But Macau was designed by the People's Republic of China to be big gaming mecca, and it's just this island just south of the island of Hong Kong. It's actually trickier to get to. I had flirted with the idea of getting over there, but I think I would have had to show my passport again on the ferry and all this stuff. In any case, it's always been interesting to me how planned it was, and how the purpose was clearly to be this enormous mecca.

Shen: Well, yeah, the moment they lifted that monopoly on who could operate the casinos, the amount of foreign investment that went into the area ...

O'Reilly: It was nuts.

Shen: Just like that, you have, now, what is still a massive market.

O'Reilly: Did you come across -- I wish I knew this off the top of my head -- what are the biggest games there?

Shen: I actually have a little bit of a breakdown I can share with you. I gave you the total gaming numbers, but just to give you an idea, VIP baccarat -- we're talking about VIP clientele, so, high net worth individuals -- is still by far the biggest game, even though it's lost its share. So, in 2010, VIP baccarat made up about 72% of total gaming revenue. But that share has fallen down to like 55% as of 2015. And again, that is going to have to do, obviously, with the crackdown that I mentioned earlier. But, if you go down market slightly to normal, more mass-market, or premium mass-market baccarat, that was at about 18.5% in 2010, and its share has grown to about a third in 2015. So, the game is still by far the most popular.

O'Reilly: For sure.

Shen: No. 3 is actually slots, and as of 2015, it only has about a 5% share of gaming revenue there. So, those two table games are by far the most popular.

O'Reilly: The penny slots are just not doing it.