What Happens Here, Only Happens Here
With Las Vegas’ first Super Bowl now in the rearview mirror, the destination has put more than its stamp on itself as the Sports and Entertainment Capital of the World. In what has been a magnificent four-month run on sports for a Las Vegas that was once a punching bag for the sports leagues, it has proven that it is one of the only cities that can put on a masterful show while providing economic impact that other cities have not been able to achieve.
By the time this article drops, we will have a clearer picture of the true economic impact of the Super Bowl, as we are still awaiting gaming and other financial numbers. Early estimates show that it was a true success for the destination. It has been estimated that just the Super Bowl alone was a $1 billion economic impact event that will have positive effects on the future.
This is not solely because of the one of the last pieces of the puzzle to come together with the opening of Allegiant Stadium in 2020 as home to the Las Vegas Raiders. It was also in what was promised to be another economic engine for the city in terms of both gaming and non-gaming revenue sources.
After decades of work, Las Vegas is continuing to reap the benefits of its longstanding mission to put “heads in beds.” The strategy has grown well beyond that initial mission of offering great entertainment, food and beverage, gaming, and a hotel room. This is using sports as an economic driver to fill up those hotel rooms, but also put on amazing events that can only be done in one destination on a routine basis—because of the critical mass that has been built in the desert.
Building the Foundation
While some will point to the opening of Allegiant Stadium as the catalyst that changed the paradigm, it is the latest in many that came to build a solid foundation for sports and entertainment as an economic driver.
The mission to have these two sectors has been a driver for decades. This includes major events, from the Wrangler National Finals Rodeo that takes place at the start of every December for a 10-day period to the Las Vegas Bowl, which saw its inaugural game in 1992, to the first NASCAR Race at Las Vegas Motor Speedway in 1998.
Sports formerly was used as a vehicle to fill the lighter occupancy months on the calendar. But Las Vegas has built a more solid foundation beyond those events to help fill the events calendar and continued its economic progress—not only designed to generate jobs and further investment, but also to generate tax revenue for education, including the building of schools and teacher salaries, but also roads and other infrastructure projects to reinvest in the destination.
Events such as the NBA Summer League, the hosting of multiple college basketball tournaments, the Las Vegas Rock ’n’ Roll Marathon, and other amateur events in basketball, baseball and other sports draw tourists to the destination who enjoy its hotels, restaurants, and other forms of entertainment.
While those decades of events have helped build the foundation, the opening of T-Mobile Arena and the inaugural season in October 2017 of the NHL’s Vegas Golden Knights provided the first major investment in a large facility on par with any other arena in the country.
MGM Resorts International had the foresight to build this facility with the vision to host a professional sports league of either hockey or basketball, allowing it to be an anchor between New York-New York and ParkMGM. The creation of The Park between the two facilities created a synergy between the two, and a gateway to the venue only accelerated the development on that end of the Strip for further investment in the existing facilities.
The Southern Nevada Infrastructure and Tourism Committee (SNTIC) served as the latest catalyst that allowed for the expansion of the convention center at the same time it allowed for the construction of Allegiant Stadium.
With the initial promise of at least 40 events a year, Allegiant has over-delivered in its original mission.
The goal of the committee was to set in motion that investment in further infrastructure for the destination. SNTIC was aided in the middle of its effort in 2016 by the Raiders looking to relocate from Oakland, California to Las Vegas. This changed the conversation from continuing the effort to invest in meetings and conventions to adding further investment in sports. Las Vegas Sands Corp. efforts to get the Raiders into the foray served as a further catalyst to drive the economics of Southern Nevada.
Economics at F1 Speed
As Formula 1 became one of the most popular sports around the globe, Las Vegas became the third stop in the United States, and hosted its inaugural race in 2023 with the Las Vegas Grand Prix.
The feat to host a race on the Las Vegas Strip is not an easy one when you have to build a stadium in and around the Strip, create the race paddock, and be able to host a race for three straight nights in a row. While lessons have been learned from the race that had some local controversy, F1 brought an audience to Las Vegas on an international level that had not been accomplished before.
The biggest growth opportunity for Las Vegas continues to be attracting further international tourists to the destination. This will further propel the economy because international guests tend to have a longer length of stay and spend more while they are in the destination. While the peak of international visitors happened in 2019 when over 3.8 million visitors came through the airport, the visitors in 2023 still were under by just over half a million visitors. However, those will return as events like F1 and others, including our existing meeting and convention calendar, continue to fill back up.
F1’s economic impact continues to be of a mega event proportion, stretching up in the $1 billion range. First and foremost, this comes from three days of Las Vegas being on televisions and streamed around the world as it hosted warm-ups, qualifying, and the race.
This multi-day advertisement alone will pay for itself, as the destination will not only welcome back the visitors that came to the inaugural race but those that will want to see this year’s race in November, or just want to come to Las Vegas because of everything else it has to offer. It is mega events like F1 and the Super Bowl that continue to offer initial and long-term impacts to the destination. This in the same way but on a different scale than the contribution of some of those earlier events.
The Business and Economics of Tourism
The Southern Nevada economy continues to be driven by the business of tourism. This is a serious economic engine that continues to shift, adapt, and enhance the model for others to follow. Very few destinations around the world can use tourism as a driver of the economy.
Las Vegas started off by using gaming as the catalyst. It has built on to that engine to surround it with MICE (Meetings, Incentives, Conferences, Exhibitions), sports, entertainment, and a host of other non-gaming amenities. It is why destinations like Singapore used two integrated resorts to propel their tourism offering. It is why destinations like Macau are doubling down on investments into non-gaming amenities to enhance the offering and driver further visitation. It’s why the United Arab Emirates has a $4 billion project with Wynn Resorts in Ras Al Khaimah to drive tourism and diversify the economy.
When the 2023 Gaming Abstract was released by the Nevada Gaming Control Board earlier this year, it showed the greatest difference between gaming and non-gaming revenue. The split was a true testament to the further diversity of the economy and the continued impact of sports on the Southern Nevada market. The split with 70 percent from non-gaming amenities to 30 percent for gaming showed a return to the trend that began at the end of the 1990s.
With the exception of one year after the Great Shutdown (2021), non-gaming has held over 50 percent of the revenue generated by the tourism sector and its supporting cast in Southern Nevada. Gaming did see an uptick during the initial year post-shutdown in 2020 but has come back to its highest level, due in part to the continued diversification and added sports amenities.
Investing for the Long Term
The continued trend of professional sports leagues finding home in Las Vegas continues with the soon-to-be Las Vegas Athletics unveiling renderings of their new $1.5 billion stadium to be located on the Las Vegas Strip. While they will not officially be home in Las Vegas until the 2028 season as the now Oakland A’s transition out of the Bay Area, once built, it will form a triangle of venues that allow events of every major scale to be hosted.
While MGM Resorts will initially benefit the most because of its proximity to these venues, the entire destination benefits from all of these events because of the scale, scope and size.
The last piece of the professional leagues will likely come in the next few years as the National Basketball Association makes Las Vegas its home with an expansion team. While it is unknown when that will occur, basketball has a proven track record in Las Vegas with current and future events, and is one of the top prospects when the NBA votes to expand.
The team’s future home may also be another economic driver, as one potential that exists is the Oak View Group proposal for the south end of the Strip coming in currently at $10 billion for the entire development.
While criticism in other communities surrounds the subsidies that are provided to sports teams for their venues, Las Vegas continues to defy the model as sports continues to be a true economic engine. This would not be possible if not for the critical mass in both gaming and non-gaming assets that provides the foundation to bring the world to its stage and host the premiere sporting events like the Super Bowl and F1.
But it is the calendar of events throughout the year at the professional, college and other levels that continue to provide the fuel that makes Southern Nevada’s economy what it is today and for the years to come.
As professional basketball and baseball appear to be poised to take root, it will further draw tourists to the destination. This has already been seen by the opponents of the Vegas Golden Knights and the Las Vegas Raiders as fans take a few days to enjoy the Sports and Entertainment Capital of the Word. This further drives revenue into the destination to support the local economy, jobs and overall investment.
The Future Looks Even Brighter
While very few cities can claim hosting a Super Bowl and an F1 race within a few months, the pipeline for sports as an economic driver continues with what is known and what is expected to be coming to Las Vegas in the coming years. A Final Four, a College Football Playoff, and other key sporting events that were once never assumed to be coming to Las Vegas are now on the books. The Final Four will take place for the first time in April 2028. The College Football Playoff will likely be in and around that time as well, as the college football calendar is extended and no longer has a significant conflict in another major event to Las Vegas when it hosts the Consumer Electronics Show at the beginning of every January.
In what initially became the phrase some two decades ago that helped shape the image of Las Vegas at that time, what happens here can only happen here. It is a model unto itself in the business of gaming, entertainment, sports and hospitality. It is a model for others to glean from to enhance their offering, but only one place in the world has a proven economic engine that works, and it’s in Southern Nevada.
This is about the business that drives the economy just as meetings, conventions, retail, food and beverage, and other amenities did to change the paradigm and the tone of Las Vegas, meaning business. The best is yet to come as future F1 races cement themselves in the destination and the Super Bowl becomes a regular fixture on the circuit of NFL cities. It is those events that will propel the long-term sustainability as others follow.
