By Kathleen Foley, Nevada Business Magazine, February 1, 2024
“Las Vegas has already earned the title of ‘Entertainment Capital of the World’, with a brand and narrative around the globe. Now we really have the substance to say we’re the ‘Sports and Entertainment Capital of the World’,” said Kerry Bubolz, president and COO of the Vegas Golden Knights. The 2023 Stanley Cup champion hockey team is one of three major league sports teams emerging in Las Vegas in the last decade, including the Las Vegas Raiders of the NFL and the Las Vegas Aces of the WNBA. Southern Nevada also boasts six minor league teams and a major sports organization (The Ultimate Fighting Champion – UFC). Four large sports venues – Allegiant Stadium, Las Vegas Ballpark, T-Mobile Arena and The Dollar Loan Center – have been constructed in fewer than six years.
“Nevada was probably the safest place in the U.S. for major league sports because it’s so highly regulated.” Kerry Bubolz Vegas Golden Knights
Ten years ago, it would have been hard to imagine that the world-famous F1 race would be held in Las Vegas in 2023 or that the Super Bowl would take place here in 2024. According to Sam Joffray, president and CEO of the Las Vegas Super Bowl LVIII Host Committee, “Building Allegiant Stadium for the Raiders was the first domino that had to fall to make all the rest possible.”
Three specific events shaped the evolution of sports in Nevada, according to Bubolz. “Ten years ago, Nevada didn’t have a major professional sports team because sports leagues were concerned about how legalized gambling would affect the integrity of their sports.” The first important event was the decision by AEG and MGM to build a new major league arena, Allegiant Stadium, which began construction in 2014 and opened in 2016. Building the facility opened up a lot of possibilities.
Then, in 2016 the National Hockey League approved Bill Foley’s application to start a ticket drive for an expansion team. “The NHL was comfortable with the idea that the gaming element would not be an issue,” said Bubolz. “In fact, Nevada was probably the safest place in the U.S. for major league sports because it’s so highly regulated.” This paved the way for other sports teams. Within six months of the Golden Knights getting approval, the Oakland Raiders started the process of moving to Las Vegas, making the new Allegiant Stadium its home base.
The third major event was a 2018 decision by the US Supreme Court striking down a federal ban on commercial sports betting. Now, more than 30 states allow legalized gambling on sports. Besides encouraging professional teams to come to Nevada, it also opened the door for collegiate sporting events, since it put the Silver State on the same footing as many other states.
Changing the Economic Landscape
A report published by the UNLV Center for Business and Economic Research (CBER) in May 2023 estimated that sporting events in Las Vegas generated $1.845 billion in direct economic output from out-of-town visitors (July 2021 to June 2022). That was long before F1 and the Super Bowl. The CBER report noted that $568,613 in room tax was collected per sporting event in FY 2022 and each visitor coming here for sports spent about $1,084, not including any money spent on gambling or tickets for shows/entertainment and sporting events.
“Sporting events have diversified and enhanced our economy in really important ways,” stated Jeremy Aguero, principal, Applied Analysis. “Sports have become a primary motivation for many people to come to Las Vegas. The trend [of travelling to see sporting events] is happening nationally, but Las Vegas benefits disproportionately. That influx generates a huge amount of money.”
Aguero noted that infrastructure created for sports creates jobs and opportunities, whether it’s the $2 billion Allegiant Stadium, the Golden Knights’ $32 million City National Arena, or the many smaller venues spread across southern Nevada. In addition to providing construction jobs while they are being built, these large arenas make it possible to host concerts and other gatherings drawing huge numbers of visitors.
Surveys by the travel industry show that when visitors come to town for a sporting event, they bring more people with them, stay longer, and spend more money than the average weekend visitor, according to Andrew Woods, Director of CBER. “Surveys by the Las Vegas Convention and Visitors Authority (LVCVA) show that 3 percent of visitors say their sole reason for coming was to attend a sporting event, and that number was slightly higher for repeat visitors. Six percent reported attending a sporting event, even though that might not have been their sole reason for coming.”
Steve Hill, president and CEO of the LVCVA, said, “The real economic impact is measuring the incremental people who came here because of a sporting event. Their spending is what drives the economy forward.”
“During the events surrounding the F1 race we got 47.8 billion impressions – six times our annual number in one week.” – Steve Hill, LVCVA
The F1 Race Drives Economic Impact
On Nov. 18, 2023, the F1 Las Vegas Grand Prix took place along the Las Vegas Strip and nearby streets, but it had already impacted the physical and economic landscape of southern Nevada in an unprecedented way. Hill said the economic impact of F1 is estimated to reach $1.25 billion. “That’s largely a function of the number of people who attended,” he explained. “It was a wealthy crowd who spent more per person, but the main impact was that it drew an additional 120,000 people to the city, much more than could fit into our stadium.” An estimated 315,000 people watched the race in person, with another 100 million viewing it across the globe.
Hill reported that the race employed 7,700 people with $361 million in wages, including construction workers and partnering companies. He estimated that the live entertainment tax generated by F1 ticket sales will reach between $30 million and $35 million. In contrast, the National Finals Rodeo brings in about $2 million in entertainment taxes and the Super Bowl is predicted to bring in $20 million. Las Vegas hotel room rates in November were the highest in history at $249.31 per night and Harry Reid International Airport recorded the best November ever, with 4.8 million passengers arriving and departing.
The public relations value of the F1 race is immense, according to Hill. “In our marketing efforts, we measure the looks or impressions we get, and in a typical year, we get 7 to 8 billion impressions worldwide for our $60 million media budget,” he said. “During the events surrounding the F1 race, we got 47.8 billion impressions – six times our annual number in one week. If we wanted to buy that kind of coverage, we’d have to spend $250 million.”
Super Results Predicted from the Big Game
On February 11, 2024, the Big Game of all big games will be held at Allegiant Stadium in Las Vegas. Before bidding for the Super Bowl, the LVCVA commissioned a study to look at the economic impact of hosting the event, and that report suggested that the economic impact would be between $600 million and $700 million, including room tax revenue, sales taxes, jobs created, and much more. According to Joffray of the host committee, “Super Bowl weekend has been the second-biggest weekend of the year after New Year’s, but it will now be the biggest.”
Although thousands of visitors come to Las Vegas during an average Super Bowl weekend, an estimated 100,000 to 125,000 additional people are expected to visit because the event is being held here. That includes not only people with tickets to the game, but also thousands more who are producing or attending the week-long series of events, all the staff people brought by the teams, and thousands covering it for the media.
Hill explained that the Super Bowl is actually a 7-day event, with about 14 official NFL events, as well as unofficial events spread out around the valley, from parties thrown by celebrities and sponsors to events hosted by the media, to rallies held by fans.
“There’s also residual impact,” Joffray explained. “People who come to Las Vegas for the Super Bowl in 2024 may like the experience so much that they’ll decide to visit for Super Bowl weekend next year, even if the game isn’t here.” Another benefit is the public relations value of having Las Vegas and the Strip mentioned so many times and shown so often on all forms of media.
Sports Benefit Local Nonprofits and Community Groups
The economic impact of major league sports is usually measured in jobs, tax receipts or tourism revenue, but one often-overlooked factor is how it benefits the communities where the teams play. For example, the Super Bowl Legacy Grant Program is distributing 58 grants totaling $3 million to southern Nevada nonprofits. The grant program is a partnership between the NFL Foundation and the Las Vegas Super Bowl Host Committee Charities and its partners. The grants provide unrestricted funding for projects and programs to permanently improve the lives of southern Nevadans.
“Both the Raiders stadium and the A’s Stadium required Community Benefit Agreements that led to millions invested in schools, communities, community-based nonprofits and those types of things,” said Aguero. “The A’s have pledged $2 million a year or 1 percent of ticket sales to funding local programs. The Raiders replaced all the football fields for the local high schools. Other projects include donations to veterans’ groups and aid to the homeless.”
The momentum for major league sports in Nevada is not slowing down. On Nov. 16, 2023, Major League Baseball owners approved the relocation of the Oakland Athletics to Las Vegas. A $1.5 billion, 33,000-seat ballpark is set to open for the 2028 season at the site of the Tropicana Hotel. The project is expected to create 16,000 construction jobs and 13,000 jobs annually.
“Both the NBA and professional soccer are checking us out,” said Aguero. “The F1 race will be here for another two years and we’ll have 10 more years of the NFR. We’ll see more neutral-site college football games here and the NCAA Basketball Final Four is coming to Las Vegas in 2028.”
“Las Vegas is betting big that the percentage of people who come to Las Vegas for a sports event will increase in the next several years,” said Woods. “Sports can be the anchor to get new people here, as well as increasing the number of repeat visitors.”
“A lot of partnerships the Super Bowl Host Committee created will have a life of their own long after the game,” said Joffray. “We worked with 9,000 volunteers throughout the community who’ll be willing and able to help with future events. We also developed a ‘strike force’ of economic development people who saw the Super Bowl as an opportunity to showcase the region. They’re making an effort during Super Bowl week to host CEOs and owners of companies looking to relocate or expand. They’ll not only see how Las Vegas can host a major event, but they’ll look at the quality of life here and all the opportunities we have away from the Strip in places like Summerlin, North Las Vegas, and Henderson.”
Hill noted that Nevada has been trying to diversify its economy for years. “Professional sports diversify the tourism industry and provides a more stable and solid foundation,” he noted. “Therefore, it also provides a stabilizing influence on the Nevada economy because it’s so allied with the tourism industry.”
“This is the infancy of a long life as the Sports and Entertainment Capital of the World,” said Joffray. “We all feel fortunate to be a part of the origin story of it all.”