Against all odds, big bets on this year’s Super Bowl host city have paid off as the stigma around gambling has eased and pro teams have overcome the challenges of a small market. Now Sin City has become Win City.
By Brett Knight, Forbes Staff
Two decades ago, Las Vegas tried to buy a commercial slot during the 2003 Super Bowl to promote tourism to the city. But the NFL stepped in, citing a contract that allowed it to reject any ad related to sports betting—even though the spot didn’t include any overt references to gambling.
How times have changed. Sunday’s Super Bowl LVIII broadcast will feature three commercials promoting sportsbooks, and the game will be played at Allegiant Stadium, walking distance from the casinos on the Las Vegas Strip.
It’s just the latest victory in the city’s unlikely rise from sports betting capital to sports capital period. Over the last six and a half years, Las Vegas has built on its long association with pro boxing—it bills itself as the Fight Capital of the World—and as the home to UFC by adding the NHL’s Golden Knights, the NFL’s Raiders and the WNBA’s Aces, plus a Formula 1 race, the 2022 NFL draft and the 2022 and 2023 Pro Bowls. Meanwhile, MLB’s A’s are slated to make the move from Oakland, and the NBA—which held its 2007 All-Star Game and 2023 In-Season Tournament final in Sin City and has played summer league games there since 2004—has also touted Las Vegas as a potential expansion-team market.
“You’ve really become Sports Town USA,” NFL commissioner Roger Goodell told a Las Vegas crowd in December. “That vision was clear. We wanted to be a part of it.”
Despite the historical concerns about bringing professional sports teams to a town famous for its casinos, Las Vegas has natural advantages as a Super Bowl host city, honed over decades as the home to major industry conventions, countless corporate events and elaborate trade shows like the tech-focused CES, which drew more than 130,000 attendees last month. More than 150,000 hotel rooms and a slew of marquee properties in close proximity to one another ease logistical concerns and give marketers plenty of venues to work with.
That setup helped feed the appetite of sports owners like Al Davis, who ran the NFL’s Raiders from 1972 until his death in 2011 and dreamed of moving his outlaw football franchise to Sin City. One NBA team tried but failed to relocate there around 2000—without the public’s knowledge—says an industry professional who was involved in the negotiations. Other pushes in basketball, baseball and Major League Soccer fizzled out as well.
“The gambling stigma was a significant issue, but it was only one of a number of significant issues,” says Marc Ganis, president of consulting firm Sportscorp. For one thing, while Las Vegas is larger than, say, New Orleans or Green Bay, it is 40th in Nielsen’s ranking of U.S. media markets, with a metro-area population of 2.3 million. That curbs a team’s potential ticket sales and—in baseball and hockey, at least—its local media revenue.
Sponsorship was another concern in a state that, Golden Knights president Kerry Bubolz notes, is home to only nine Fortune 1000 companies—“and five of them are gaming companies.” That industry was a particularly tricky fit because, given that pro sports could theoretically pull fans away from slot machines and table games, there were no guarantees that the casinos would support a new team, politically or with their pocketbooks.
A brief history of how Las Vegas became a sports mecca—and a title town.
T-Mobile Arena opens.
The Golden Knights start their first season.
The Aces start their first season.
The Raiders play their first game in Las Vegas.
The Aces win their first WNBA title.
The Golden Knights win their first Stanley Cup.
The Aces win a second straight WNBA title.
The A’s are approved to move to Las Vegas. Formula 1 holds its inaugural Las Vegas Grand Prix.
Las Vegas hosts its first Super Bowl.
In fact, the casinos embraced the incoming teams. “It’s just giving people another reason to come to Las Vegas,” says Lance Evans, senior vice president for global sports corporate partnerships and sponsorships at MGM Resorts International, which is a co-owner of the Golden Knights’ T-Mobile Arena and sponsors the Knights, the Raiders and Formula 1’s Las Vegas Grand Prix. Sportsbooks and casinos across Nevada are handling more bets than ever, with revenue reaching a record $15.5 billion in 2023.
The stigma around gambling began to ease after the Supreme Court in 2018 struck down the law known as PASPA, which had effectively banned sports betting in most of the country. Wagering on sports is now legal in 38 states, and leagues like the NFL that once opposed gambling have had to quickly adjust to the new reality.
Billionaire owner Bill Foley’s Golden Knights were the first team to arrive in Las Vegas, hitting the ice in 2017 as an expansion team at privately financed T-Mobile Arena, just off the Strip. “They proved there was local support and commercial support to be able to generate enough revenue to thrive,” says Connor Hallisey, senior vice president at investment bank Accelerate Sports, “so I think it made it easy for these other leagues to follow.”
After a game of NFL musical chairs that saw the Rams and the Chargers land in Los Angeles, $750 million in public funding toward the $1.9 billion construction of Allegiant Stadium enticed the Raiders to leave Oakland for the 2020 season. That money is coming from a 0.88% tax on hotel rooms, which shifts most of the burden from locals to visitors.
“Just consider for a moment that Allegiant Stadium has spun off $128 million in tax revenue,” Clark County Commissioner James B. Gibson says, citing a 2023 impact report issued by the Raiders as he makes the case that the return has justified the investment. “It’s redefined us.”
At the same time, sports business trends have made Las Vegas a more viable market than it once might have seemed. For instance, with new stadiums and arenas emphasizing suites and luxury amenities, “it’s not the number of asses you get in the seats; it’s what you get per ass that counts,” says one investment banker.
There’s also the unresolved question around the future of local media deals after regional-sports-network powerhouse Diamond Sports Group filed for Chapter 11 bankruptcy last year. Edwin E. Draughan, vice president at investment bank Park Lane, notes that the Los Angeles Dodgers’ and New York Yankees’ RSNs are still cash cows but says that, in general, “it’s becoming less of a ‘we need a big market in order to fully fulfill our abilities to monetize the market.’ Real estate, for the team owners, seems to be more important.”
Even so, it would have been hard to predict the way the Las Vegas teams came out of the gate. The Golden Knights reached the Stanley Cup finals in their first season and won a championship in their sixth, in 2023. The Aces, who moved from San Antonio in 2018, claimed back-to-back titles in 2022 and 2023.
The front offices have been just as successful. The Golden Knights were 14th in the NHL in average attendance this season through 26 home games, at 18,120, but were first in attendance as a percentage of official arena capacity, at 103.5%, according to Hockey Reference. Fan retention is aided by what many in the industry call the sport’s best in-arena entertainment.
“A lot of our pricing models were built off of the average ticket price for a show on the Strip, but we knew that if we were going to charge that much, we were going to have to deliver an entertainment experience that was beyond just the game on the ice,” Bubolz says. Warm-ups, for instance, take place alongside a “wall of distraction” that has starred Vegas showgirls and the Thunder Down Under show.
The Golden Knights have also gotten creative with partnerships, overindexing in categories such as personal injury lawyers, artificial turf, and heating and air conditioning. “What the numbers have shown is that, literally since Day 1, we’ve been top five in all the key revenue areas of local sponsorships, local ticket sales and premium, on top of ratings,” Bubolz says.
A new TV deal announced in May 2023 has the Golden Knights looking to expand their fan base in the Mountain West region, with games now airing in five media markets in Montana, but otherwise, the team has kept its focus on locals. (Bubolz says the vast majority of tickets are purchased by fans with 702 area codes.) The Raiders, on the other hand, have embraced out-of-towners, who can number 300,000 on any given weekend in Las Vegas. Steve Hill, CEO of the Las Vegas Convention and Visitors Authority and chairman of the Las Vegas Stadium Authority, which owns Allegiant Stadium, says the team may be drawing as many visitors as locals.
“Every team that we play, when the schedule comes out, their fans put a circle around it and say, ‘We’re going to that game,’” says Raiders owner Mark Davis, Al’s son.
Davis’ other team, the Aces, which he bought in 2021 from MGM Resorts International, led the WNBA in attendance in 2023 with 9,551 per game, according to Across the Timeline. Season tickets also crossed the 6,000 mark, a 194% increase since Davis took over. “We’re double any other season-ticket base right now,” Davis says, while team president Nikki Fargas proudly points out that 2023 produced a 91% renewal rate. She adds that the Aces doubled their number of partners from the end of 2022 to the end of 2023 and increased partnership revenue by 310%, with both figures expected to keep climbing in 2024.
On The Horizon
Forbes most recently valued the Golden Knights at $1.13 billion (No. 18 in the NHL) and the Raiders at $6.2 billion (No. 6 in the NFL), but sports bankers say that if Foley and Davis ever decide to sell, playing in Las Vegas—a city with cachet that happens to be a short flight from Southern California—could net them a wider pool of prospective buyers. “And more bidders creates competitive tension, and that drives price,” one banker explains. Some in the industry believe that the expansion fee for an NBA team in Las Vegas could pass $4 billion, Ganis says.
The city is also benefiting from the sports transformation, which extends beyond the major pro teams to smaller sports including the National Lacrosse League’s Desert Dogs and the Pro Volleyball Federation’s Thrill. This week, LIV Golf held a Las Vegas tournament for the first time, and the National Finals Rodeo and the Professional Bull Riders world finals remain prominent fixtures on the calendar.
All of the events are attracting more tourists. As a point of reference, Hill says that Allegiant Stadium was projected to bring in 450,000 incremental visitors out of annual attendance of roughly 2 million; in reality, the last full year of data showed more than 800,000. That doesn’t necessarily make a huge impact on the number of hotel rooms sold—Hill says the city’s average occupancy is around 94% on weekends—but the visitors tend to be bigger spenders and stay more nights.
The sports ascendancy hasn’t been without speed bumps. Construction ahead of last year’s inaugural Las Vegas Grand Prix snarled traffic for months, and while some hotels hit paydirt—MGM said in December that it was its highest-grossing weekend for hotel revenue ever—a group of nine businesses is seeking reimbursement from the Visitors Authority for $23 million in lost revenue.
Just this week, the A’s ran into resistance for their plan to move to Las Vegas—which already has state approval for $380 million in public financing toward a new stadium at the site of the Tropicana hotel—when Mayor Carolyn Goodman suggested the team should try to stay in Oakland. (She later walked back that statement.) Meanwhile, the nine-acre site of the proposed stadium doesn’t leave room for commercial development, and many in the industry say privately that they’re not convinced that a baseball team—which has to fill its stadium 81 times a season—will be as successful as the Golden Knights or the Raiders have been, particularly arriving on the scene relatively late in the game.
Still, “if you’re trying to look at the bright side of things, it can’t get much worse than what they’re doing in Oakland,” Draughan says. City officials are also staying optimistic around the annual F1 race, saying they learned valuable lessons in November. And expectations remain sky high, of course, for Sunday’s Super Bowl.
The NFL pushes back on the idea that it has a “rotation” of Super Bowl host cities, but even if there’s generally an expectation that a new stadium will get its own championship game, there’s no guarantee that another will follow in the future. No one seems to be worried, though, that Las Vegas will be another Detroit, which hasn’t had its number called since 2006.
“You only get one chance at a first impression,” Mark Davis says, “but I think Las Vegas knows how to do these things. I don’t think this is the last time that the National Football League will be back here for a Super Bowl.”
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