From casino capital to sports powerhouse: Las Vegas transforms its economic foundation
Business & Economy – Analysis
Las Vegas is orchestrating a fundamental shift from its century-old gambling-centric identity toward becoming a comprehensive sports and entertainment destination, as gaming’s dominance in tourism revenue continues to decline despite overall market growth.
The economic transformation underway
The numbers tell a compelling story of economic evolution. Among Clark County casinos generating at least $1 million in gaming revenue during fiscal year 2024, gaming represented just 34.2% of total revenue—a dramatic decline from the 61.5% share recorded in 1990. This transformation reflects broader changes in visitor spending patterns, with room revenue and food and beverage sales capturing increasingly larger portions of the tourism dollar.
Las Vegas Convention and Visitors Authority data reinforces this trend, showing substantial growth in spending on sports and entertainment activities. The shift represents both challenge and opportunity for a destination that built its reputation on casino floors but now finds itself competing in an era of widespread gambling legalization across the United States.
Soo Kim, chairman of Bally’s Corporation, acknowledges this reality: “It’s not lost upon us that Vegas is slowly but surely attracting many more dollars of non-gaming as it is gaming.” This recognition is driving fundamental changes in how developers approach new projects throughout the valley.
Revolutionary resort development model
The most visible example of this transformation is emerging at the former Tropicana site, where Bally’s is planning a groundbreaking development centered around the Oakland Athletics’ new $1.75 billion baseball stadium. The project represents a radical departure from traditional Las Vegas resort concepts.
Kim explains the financial reality driving this innovation: “When we pencilled out what I would call a traditional casino resort, sort of on the pathway of Resorts World or Fontainebleau, we couldn’t make the numbers work.” Instead, Bally’s is embracing a model that prioritizes retail entertainment districts over conventional casino operations.
The development will allocate nine of 35 acres to the Athletics’ state-of-the-art ballpark, with Bally’s constructing a resort in multiple phases featuring up to 3,000 rooms. However, the emphasis will be on creating a comprehensive entertainment district rather than a gambling-focused destination, following successful models like The Battery Atlanta adjacent to the Braves’ stadium.
Kim points to nearby developments like BLVD as inspiration, noting: “BLVD is very inspirational in just the basic concept that there you have a Stripfront property that is generating economic return for its investors and owners without a casino.”
Sports as economic engine
The transformation extends far beyond individual developments. Las Vegas has rapidly evolved from a city largely excluded from major professional sports to hosting teams from all four major leagues within less than a decade. The Golden Knights began play in 2017, followed by the Las Vegas Aces in 2018 and the Raiders in 2020.
University of Nevada, Las Vegas estimates indicate that sporting events generated more than $1.8 billion in direct output from out-of-town visitors during fiscal year 2022. While comprehensive historical comparisons remain limited, LVCVA surveys reveal dramatic growth in per-visitor sports spending, jumping from $129.16 in 2019 to $357.06 in 2024.
The Super Bowl’s February 2024 Las Vegas debut provided concrete evidence of sports’ economic potential, with the event bringing an estimated $1 billion to the local economy. The subsequent 12% year-over-year drop in February 2025 visitors and 25% decrease in average room rates demonstrated the event’s exceptional impact.
Strategic importance for future growth
Sports infrastructure may prove increasingly crucial as Las Vegas faces potential tourism headwinds. Despite 2024 visitor numbers approaching pre-pandemic levels, concerns about tariffs, stock market volatility, and federal policies affecting international travel could impact future growth. The LVCVA projects a 5% decrease in room tax revenue for the 12 months ending June 2026.
Steve Hill, chairman of the Las Vegas Stadium Authority and president/CEO of the LVCVA, emphasizes sports’ marketing value beyond direct spending: “There is a marketing impact and other indirect benefits from professional sports.” He notes that Allegiant Stadium has enabled Las Vegas to host larger and different types of events than previously possible.
The venue also facilitates natural partnerships, such as the LVCVA sponsoring Aces players to serve as social media influencers promoting Las Vegas. This collaboration comes as women’s basketball experiences explosive popularity growth, leading the Aces to consider arena expansion.
Emerging sports infrastructure
Beyond professional leagues, Las Vegas is developing comprehensive sports infrastructure through projects like Hylo Park in North Las Vegas. California-based Agora Realty & Management is investing approximately $380 million to transform two former pandemic-casualty casinos into a sports-centered community featuring an Olympic village concept for youth tournaments and similar events.
The facility will include indoor and outdoor sports complexes, an on-site hotel, and various amenities including grocery and restaurant options serving an adjacent 393-home residential development by Lennar Homes. Expected completion is set for first quarter 2027, with projections of adding around 1,200 new jobs to the area.
Terri Sheridan, director of economic development for North Las Vegas, describes the project’s significance: “It’s going to be very unique and all-encompassing. Being able to bring jobs back to the area is great news, along with the overall investment in an area that had sat vacant for several years.”
Complementary industry development
Sports development is catalyzing growth in related sectors. Hylo Park will include a youth sports academy offering training and physical therapy services, while the broader sports ecosystem supports media and gaming industries. DraftKings exemplified this trend by opening a 90,000-square-foot, technology-focused office employing more than 1,000 people in 2023.
Hill emphasizes how professional sports provide powerful signals to other industries: “When a league like the NFL says we’re going to be a part of your community, it makes a statement to people, even those who are not NFL fans, that Vegas is mature, Vegas is a professional city, it’s a global city.”
This maturation process extends to trade shows and conventions, where professional sports presence helps Las Vegas compete for major events and corporate relocations.
Financial and operational challenges
Despite optimistic projections, the sports-centered development model faces significant challenges. Gaming analyst Barry Jonas has questioned Bally’s progress on its resort plans, noting the company’s attention has shifted to projects in New York City, Chicago, and Australia. Bally’s pays $10.5 million annually to lease the 35-acre Strip site but has generated zero revenue from the location since closing the Tropicana more than a year ago.
The Athletics face their own timeline pressures, with construction beginning in May 2025 for a planned 2028 opening. The team is currently playing temporary home games in Sacramento while navigating the complex logistics of building in one of the world’s most expensive real estate markets.
Long-term economic implications
The sports-driven economic diversification represents a fundamental reimagining of Las Vegas’s value proposition. Rather than relying primarily on gambling revenue from a shrinking relative market share, the city is positioning itself as a comprehensive entertainment destination where sports serve as anchor attractions driving broader economic activity.
This transformation reflects broader trends in American entertainment consumption, where experiences increasingly compete with traditional gambling for discretionary spending. Las Vegas’s unique tourism infrastructure and marketing capabilities provide advantages in capitalizing on these shifts.
The success of this diversification strategy will ultimately depend on execution of major projects like the Athletics stadium and Bally’s resort, along with continued development of complementary infrastructure throughout the valley. Early indicators suggest strong market reception, but the true test will come as these ambitious projects move from planning to operation over the next several years.
Image Source: https://capturetheatlas.com/things-to-do-in-las-vegas-strip/
Category: Business, Sports
Subcategory: Local Economy
Date: 06/23/2025
