Las Vegas is one of the all-time great boom towns in U.S. history.

Nothing more than a forgotten Dust Bowl in the 1940s, Vegas grew into one of the hottest tourist destinations in the world by the late ’50s and early ’60s. Tourists, vacationers, celebrities and gamblers from across the world flocked to Vegas, producing an economic boom that continues to produce huge gains for investors.

But now, 50 years later, that same incredible growth story is repeating itself in another part of the world. In fact, this Far East gambling destination is growing so fast that its annual revenue last year was more than six times that of Vegas.

I’m talking about Macau, the undisputed leader in the global entertainment and gambling industry.#-ad_banner-#

Along with Hong Kong, Macau is one of two special administrative regions of China. Under the principle of “one country, two systems,” Macau enjoys a high degree of autonomy, governed by its own legal system, police force, monetary system and immigration policy.

The region has been quick to capitalize on that independence, giving birth to a booming tourist industry that isn’t just threatening Vegas, but dethroning the incumbent as the premier entertainment and gambling destination in the world.

Last year was stellar for Macau and its booming tourist industry, with its 33 casinos booking a record $38 billion in revenue. That bullish growth has continued into 2013, with revenue of $3.9 billion in March, a new monthly record.

This incredible growth is attracting capital from all over the world, particularly from leading U.S. entertainment and gambling companies. As they seek new markets for expansion, U.S. gambling companies have been making big investments in Macau. And that is creating big opportunities for investors to cash in on the second coming of Vegas and the new king of the global entertainment and gambling scene.

But revenue growth isn’t the only reason companies and investors are cashing in on Macau.

Although casino stocks are sensitive to discretionary spending, they also operate in a highly insulated and regulated industry. It’s capital-intensive to build a resort and casino, and even if a company is prepared to make a multibillion-dollar investment in one, it can be difficult to get a permit because gambling is one of the most regulated industries in the world.

Here are four companies making big investments in Macau.

From this list, I have chosen to highlight Wynn Resorts (Nasdaq: WYNN) because of its upward momentum and dividend and Las Vegas Sands (NYSE: LVS) because of its dominant presence in Macau.

Wynn Resorts
Wynn Resorts has been a leader in Macau, making early investments in the “Vegas of China” that are now paying big dividends.

Its flagship operation is the Wynn Macau, a luxury resort and casino that feature 600 hotel rooms, 212 gambling tables and 375 slot machines in about 205,000 square feet. Wynn Macau is now Wynn’s highest-revenue and fastest-growing segment, with first-quarter revenue of $998 million up 6% from the same period last year and accounting for 78% of total company sales.

Looking forward, analysts are calling for earnings growth of 24% in 2013 and another 10% in 2014. But in spite of those bullish projections, Wynn still looks undervalued, trading with a forward P/E (price-to-earnings) ratio of 20, a sharp discount to its 10-year average of 37. And with a dividend of 2.9%, Wynn is a nice combination of growth, value and income.

Las Vegas Sands
Las Vegas Sands is one of the largest entertainment and gambling companies in the world, valued at more than $37 billion. That scale made Sands a great candidate for aggressive international expansion into Asia and Macau. Through the company’s majority-owned Sands China, Las Vegas Sands owns a number of properties in Macau.

The company’s flagship offering is the Sands Macau, a 229,000-square-foot resort with 289 hotel suites. Opened in 2004 at a cost of $240 million, Sands Macau has been a huge moneymaker for Las Vegas Sands. With first-quarter revenue up 39% from last year, to $2 billion, Sands China accounted for 70% of total revenue of $3.3 billion. Not only is Sands China Las Vegas Sands’ biggest moneymaker, it’s also its fastest-growing property.

Risks to Consider: The huge boom in Macau has been driven by explosive growth in Asia, particularly China. Although high-end consumers are less vulnerable to economic weakness, Chinese economic growth continues to slow, which could be a drag on total discretionary spending.
 
Action to Take –> Macau is producing huge gains for the entertainment and gambling industry, and that is creating an opportunity for investors as well. These four companies have been leading the charge in Macau, seeing big gains from early investments in the region. But looking forward, analysts still see plenty of growth. From the group, consider Wynn Resorts for its upward momentum and dividend and Las Vegas Sands for its dominant presence in Macau.

P.S. — Our in-house poker player Amy Calistri keeps her eyes on these types of stocks and many others. Her simple investing strategy has found recent big winners like Yahoo and Starbucks. To find out how she does it, click here.