minneapolis
CNN
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When Formula 1 race cars zip along the iconic Las Vegas Strip this Sunday, it will serve as another stark reminder of major changes in the city’s economy.
Long known for its casinos, gourmet food, and live entertainment, in less than a decade this desert city has become home to four major league sports teams (the most recent being MLB’s Athletics), six minor league teams, and It has become the home of a major sports organization for ultimate martial arts. Champions and four major sports venues hosting events such as NCAA Tournament games, the NFL Pro Bowl, and Super Bowl III this February.
With at least six more venues in the planning stages, the city appears poised to become one of the top choices for NBA expansion teams and even MLS teams.
“Ten years ago, leagues didn’t even 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 we feel like we’re the stars of the ball.”
Is Las Vegas a sports city? This is a potentially lucrative development that could lead to urban expansion and a broader economic base. However, there will be growing pains.
Initial economic impact estimates for Sunday’s F1 Las Vegas Grand Prix and the February 2024 Super Bowl were $1.3 billion and $500 million, respectively. (However, this was before the championship was won at the beginning of the season and F1 ticket prices fell).
This total represents an estimated 18 million dollars contributed to metropolitan areas by all sporting events from July 2021 to June 2022, according to an economic impact study released this summer by the Center for Business and Economic Research at UNLV Lee School of Business. It is said to be equivalent to a billion dollars.
However, bigger events come with bigger challenges. Construction and preparations for the F1 race are disrupting traffic and disrupting local residents in the process. Also angering longtime residents and tourists are the (initially) exorbitant prices and temporary bleachers and signage that obscure views from the Bellagio Fountains to the Mirage Volcano. There is a possibility that it may be blocked.
“There are questions about whether we have enough infrastructure to handle increasingly large events,” Woods said. “How do we make this beneficial for both a community that will soon have 3 million residents and 50 million visitors a year, and make it work for everyone? ?”
And initially, it doesn’t seem like everyone benefits equally from the sport’s double down. While researching the intensity of sports in the Las Vegas area, Woods and his team noticed an alarming trend: the “sports desert.”
Their research found that for some communities, especially those that have been historically underserved, access to parks, local sports businesses and facilities may not be the same. . Woods said further research is needed to confirm the initial findings.
Sports has had deep roots in Las Vegas for decades, dating back to the heyday of boxing and the rise of sports betting in the 1950s and 1960s. Super Bowl Sunday and March His Madness tournaments typically pack casinos and sportsbooks.
But the NFL and other leagues have opposed locating sports franchises in Las Vegas for decades, likely because of the city’s deeply entrenched gambling industry. At one point, the city was unable to run tourism ads during the Super Bowl.
By 2017, sentiment began to change even among league commissioners like the NFL’s Roger Goodell, as the National Hockey League and Oakland Raiders made plans to set up shop there.
“I think there’s been a bit of a shift in society as a whole when it comes to gambling in general,” Goodell said at a press conference in March 2017. “Vegas isn’t the same city it was 10, 20 years ago. It’s a much more diverse city, and it’s become a mecca for entertainment.”
John Fisher/Getty Images
Major League Baseball owners unanimously approved the Oakland Athletics’ move to Las Vegas last week.
He added: “They made a very convincing proposal and the owners obviously approved it overwhelmingly.”
And in 2018, the Supreme Court struck down a federal law banning commercial sports betting in most states.
As sports betting exploded into people’s living rooms, Las Vegas remained the center of its digital industry, home to casino operators backing sportsbooks and online gambling companies like FanDuel. The rise of sports betting and the continued explosion of fantasy football have further fueled interest in sports and, as a result, returned to Las Vegas, said Steve Hill, chief executive officer of the Las Vegas Convention and Visitors Authority.
“Las Vegas fans also tend to be sports fans, and sports helps expand the customer base that considers Las Vegas,” Hill said.
According to the LVCVA 2022 Las Vegas Visitor Profile Survey, 6% of surveyed visitors attended a sporting event last year, up from 3% in 2019, and 4% of visitors said a sporting event was the reason they traveled to Las Vegas. answered that this was the main reason.
“I think the city and businesses are making a big bet that both of these percentages will increase,” UNLV’s Woods said. Add in more sporting events and it’s 4 years. ”
overcome ups and downs
The city that once billed itself as the “Entertainment Capital of the World” has now been rebranded as the “Sports and Entertainment Capital of the World.”
Although sports are growing in Las Vegas, leisure and hospitality remain the city’s bread and butter. In Clark County, Nevada, where Las Vegas is located, one in four workers works in the leisure and hospitality industry, and one in every three dollars is generated by these businesses, Woods said.
And over the past two years, Las Vegas and other tourist-heavy cities have benefited from post-pandemic consumers splurging on experiences and travel rather than products. Monthly gaming revenue in Nevada this year exceeded pre-pandemic levels, hitting a nominal monthly record $1.4 billion in July, according to data from the Nevada Gaming Control Board.
A deep focus on one industry can be beneficial in good times, but in downturns it can have a devastating impact on the local economy.
In April 2020, Las Vegas’ unemployment rate soared to an alarming 34% due to coronavirus shutdowns, making the metropolitan area the hardest hit in the United States.
“The Strip was shut down, and that’s where service revenue is generated and livelihoods are generated for hundreds of thousands of people. It was scary and scary at the time,” Hill said.
Ethan Miller/Getty Images/File
The Las Vegas Strip is visible from outside the balcony doors of Allegiant Stadium during a game on October 15, 2023 in Las Vegas, Nevada.
As the pandemic progressed, expansion work continued at places like the Las Vegas Convention Center and Raiders Allegiant Stadium.
“The city continued to bet on itself,” Hill said. “And it really paid off.”
Although the sporting events industry is located within the leisure and hospitality sector, there is initial evidence that this investment could foster regional economic diversification through the rise of ancillary businesses in areas such as hospitality, marketing and healthcare. There are some signs.
According to a UNLV study, the number of companies involved in sports instruction has increased 156% over the past 10 years. The report also says there has been a marked increase in youth sports participation, particularly among girls and young women.
“Anytime you can broaden the economic engine, that’s going to have a stabilizing effect and probably also a growth effect,” Hill said. “It doesn’t matter what’s going on in the economy, especially when it comes to team sports. There’s always going to be an event. That’s why people decide to come to Las Vegas.”