When Formula 1 racing cars tear up the famous Las Vegas Strip, it will serve as another reminder of the city’s economic transformation.
In less than a decade, the desert city once known for casinos, food and entertainment has become home to four major league sports teams (the most recent being MLB’s Athletics), six major league teams, and the largest sports team in Ultimate Fighting. Champion, with four major sports venues hosting events such as the NCAA championship game, NFL Pro Bowls, and, coming this February, Super Bowl LVIII.
At least half a dozen other locations are in the works, and the city appears to be one of the top contenders for an NBA expansion team and an MLS team.
“Ten years ago, players didn’t want to look at us twice,” said Andrew Woods, director of the Center for Business and Economic Research at the University of Nevada, Las Vegas. “Now it looks like we’re football fans.”
Is Las Vegas a gambling city? It is a potentially profitable development that can increase the growth and economic base of the city; however, it comes with growing pains.
The first financial estimates for Formula 1 Las Vegas Grand Prix Sunday and February 2024 Super Bowl were $ 1.3 billion, and $ 500 million, respectively. (But this was before F1 ticket prices when the race was won earlier in the season).
That figure would equate to $1.8 billion in spending on the metro area and all sporting events from July 2021 to June 2022, according to an economic study released this summer by the Center for Business and Economic Research at UNLV’s Lee Business School.
It is a big event, however, that brings with it big problems. The construction and preparation of the F1 race has disrupted the population, affecting the local population. Also angering long-time residents and visitors alike are the (initially) high prices and blocked views of everything from the Bellagio fountains to the Mirage volcano, due to temporary overhangs and signs.
“There are questions about whether we have enough resources to deal with larger and larger events,” Woods said. “How can we make this beneficial for all the people of a community that will soon have 3 million people and have 50 million visitors a year and help everyone?”
And at first, it doesn’t seem like everyone is benefiting equally from the doubles game. Revisiting the strength of the sport in Las Vegas, Woods and his team saw a troubling situation: “sporting deserts,” a lack of space.
Some neighborhoods, especially those that have been underserved in the past, may not have access to parks, local businesses and workplaces, they found. Woods said more research needs to be done to confirm his initial findings.
Sports have been popular in Las Vegas for years, dating back to the boxing days of the 1950s and 1960s and the rise of sports betting. Super Bowl Sunday and March Madness games often bring casinos full of sports books.
But for years, the NFL and other players opposed having sports franchises in Las Vegas, partly because of the city’s deep gambling industry. At one point, the city couldn’t run a Super Bowl tourism ad.
By 2017, attitudes had begun to change – including among league commissioners such as the NFL’s Roger Goodell – as the National Hockey League and the Oakland Raiders had plans to set up shop there.
“I think a lot of people have changed a little bit when it comes to gambling,” Goodell said at a press conference in March 2017. “Vegas is not the same city it was 10 or 20 years ago. It’s a very diverse city, it’s become an entertainment mecca.”
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Major League Baseball owners last week unanimously approved the relocation of the Oakland Athletics to Las Vegas.
He added: “He made a very encouraging suggestion, which obviously the ownership was very receptive to.”
Then came a 2018 decision from the Supreme Court striking down a federal law that banned commercial sports betting in many states.
While sports betting has spread to social rooms, Vegas has remained at the center of the digital industry – home to casino operators who support the sports books and online gambling companies such as FanDuel. The rise of sports betting and the explosion of fantasy sports led to increased interest in sports and, in turn, back to Vegas, said Steve Hill, executive director of the Las Vegas Convention and Visitors Authority.
“Vegas fans tend to be sports fans, too, and sports will help us expand the customer base that wants to consider Las Vegas,” Hill said.
Last year, 6% of visitors surveyed participated in sports, up from 3% in 2019, and 4% of visitors said sporting events were the main reason for a visit to Vegas, according to the LVCVA 2022 Las Vegas Visitor Profile Study.
“I think the city and our businesses are taking a lot of money to get those percentages up,” said UNLV’s Woods, “so we could see those percentages double in the near future, in the next two, three, four years as we add more sports events.”
High and low temperatures
The city that called itself the “Entertainment Capital of the World” has now been dubbed the “Sports and Entertainment Capital of the World.”
Gaming is growing in Las Vegas, but entertainment and hospitality remain the city’s bread and butter. In Clark County, Nevada, where Las Vegas is located, one in four workers is in the leisure and hospitality industry, and $1 out of every $3 is generated by those businesses, Woods said.
And in the past two years, Las Vegas and other tourist-heavy cities have benefited from the post-pandemic consumer experience and travel versus property. Nevada’s monthly gaming revenue this year surpassed all previous records and topped out at $1.4 billion in July, according to Nevada Gaming Control Board data.
Having a deep interest in one market can be good when times are good, but in a recession, it can be very damaging to the local economy.
In April 2020, the Covid-19 shutdown led to a 34% increase in business in Las Vegas, as the metro area became the hardest hit in the United States.
“That line was shut down, and that’s where the money for jobs is made and that’s where the lives of thousands of people are made, and it was very dangerous and dangerous at the time,” Hill said.
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The Las Vegas Strip can be seen outside the lanai doors at Allegiant Stadium during a game on October 15, 2023, in Las Vegas, Nevada.
As the pandemic worsened, construction continued to expand the Las Vegas Convention Center and the Raiders’ Allegiant Stadium, among other projects.
“The city continued to bet,” Hill said. “And that really paid off.”
Although the sports industry is located in the leisure and hospitality areas, there are early indications that the investment could bring about a diversification of the regional economy, due to the rise of supporting businesses in areas such as services, trade and medicine.
The number of sports coaching businesses has increased 156% over the past 10 years, according to a UNLV study. And the number of young people in sports, especially among girls and young women, has increased significantly, according to reports.
“Any time you can expand what’s driving the economy, it’s also encouraging stability and expansion,” Hill said. “When it comes especially to team sports, no matter what’s going on economically, you’re going to have that experience, and that’s why people choose to come to Las Vegas.”