The recovery in Las Vegas gaming seems to be following the same path as the U.S. economic recovery. Some good news here, a bad report there, and at the end of the day we don't really go anywhere. But maybe that shouldn't come as a big surprise, since those who are lucky enough to have a job aren't looking to gamble it away on a pai gow poker table.

Across the Pacific, Macau is also following China's more impressive growth curve, increasing revenue at an incredible pace. Las Vegas Sands (NYSE: LVS), Wynn Resorts (Nasdaq: WYNN), Melco Crown (Nasdaq: MPEL), and to a lesser extent MGM Resorts (NYSE: MGM) have benefited from the growing appetite for gaming in the area. But as Macau grows it shows just how unimpressive Las Vegas has been.

It's remarkable how stagnant Las Vegas gaming has become recently. Since hitting all-time highs in 2007, Las Vegas Strip gaming revenue dropped for two years and has been virtually flat since.

Year

Strip Gaming Revenue

Year-Over-Year Change

2011 $1.95 billion through April (0.8%)
2010 $5.77 billion 4.0%
2009 $5.55 billion (9.5%)
2008 $6.13 billion (10.2%)
2007 $6.83 billion 2.1%

Source: Las Vegas Review-Journal.

And more casinos opened during that time, so the dollars lost at the tables are being spread around. But a drop in gaming doesn't mean the death of Las Vegas; there's money being spent elsewhere.

A silver lining
Just because people aren't hitting the tables doesn't mean they don't still want to be in on the action. Visitation to Sin City rose 4.8% in April and was up 5.1% in the first quarter, driven by conventions. Maybe Las Vegas is becoming more of a Cirque du Soleil and restaurant destination with a lot of meeting space.

The smart thing Las Vegas did years ago was diversifying revenue beyond gambling to rooms, restaurants, and other attractions. One thing that is becoming apparent is that gambling isn't coming back any time soon, especially if an economic recovery doesn't take hold. For a better gamble, investors should place their bets on Macau.

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Fool contributor Travis Hoium owns shares of Melco Crown that are covered with call options and has sold puts in Las Vegas Sands. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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