Tourism and gambling are the biggest economic drivers in Las Vegas, bringing in the most money to the regional economy. According to the American Gaming Association, the economic impact of Nevada’s casino industry totaled $59.4 billion in 2023, and the industry was responsible for supporting more than 330,000 jobs. These numbers underscore how important tourism is to the Las Vegas economy. While that sounds good in hindsight, over-reliance on tourism poses a challenge to the overall health of Southern Nevada’s economy when gambling revenues decline.
Imagine going “all in” on poker – a very risky situation, isn’t it? That’s the situation of the Las Vegas economy, which is “all in” on tourism and gambling, making the region very vulnerable to economic shocks. For example: Tourism analysis (2021) reports that during the pandemic, tourism visitor traffic fell by 55%, resulting in a decline in employment rates in the tourism sectors by over 32.5%. During just one 78-day casino closure, Las Vegas lost over 6.2 billion US dollarsIn addition, the Las Vegas Global Economic Alliance (LVGEA) published “Vision 2025: A comprehensive economic development strategy” and stressed that the most important goal for Southern Nevada is to promote a resilient and diverse economy. In addition, Southern Nevada Regional Study A report prepared by Brookings Mountain West, the UNLV Center for Business and Economic Research, and the UNLV Transportation Research Center confirms that Southern Nevada lacks an administrative structure to coordinate the necessary economic and infrastructure priorities. The report mentions Southern Nevada’s application for the U.S. Economic Development Administration’s (EDA) Build Back Better Regional Challenge grant, which offers millions of dollars in funding to support regional economic development initiatives. While the grant was unsuccessful, it is still an attempt to “get in the game” for federal funds to support the regional economy.
Even after the pandemic, Las Vegas is increasingly dependent on the tourism sector. According to the Sun in Las Vegas (2024), the Increasing the Value of Our Nation Through Economic Assistance and Tourism (INVEST) Act will generate enormous amounts of money for tourism. Nevada Business (2023) reports that the Destination Development Demonstration (3D) grant aims to bring funds to Nevada’s rural towns to support long-term tourism development in the region. While such funding has positive short-term impacts, it reflects our dependence on the tourism and gaming sector. The Las Vegas tourism and gaming industry continues to generate record revenues, and we should never neglect to make the necessary infrastructure investments in the tourism and gaming sector. We can do two things at once – continue to strengthen our core industry while diversifying our economy into sectors where it is needed.
A current example of this is the success of investments in the sports and entertainment sector. Center for Economic and Business Research at UNLV (2023) estimates that sporting events in Las Vegas generated direct revenue of $1.845 billion in fiscal year 2022 alone. For this reason, Las Vegas is investing heavily in sports such as the teams of the National Football League, the National Hockey League, the Women’s National Basketball Association, and the United Soccer League – all of which were added in the last decade.
To further strengthen its economic resilience, Las Vegas should implement successful strategies used by comparable cities such as Portland and San Antonio. For example, Portland’s distribution and diverse manufacturing economy is Portland’s economic center. Although Portland’s economic center is distribution and manufacturing, the city has not failed to diversify its economy. For example, the Portland City Council has approved the adoption of the Climate Investment Plan (CIP), which will invest over $750 million in advancing climate justice and help Portland reach its five-year goal of net-zero carbon emissions. According to the Portland’s economic development strategyPortland has set a goal to create 10,000 jobs within five years by investing in green technologies and sustainable practices, another example of a successful diversification strategy.
Another example is San Antonio, whose core economy is manufacturing. However, this city is also working to diversify its economy, as San Antonio’s focus on the biomedical sector and partnerships with educational institutions have boosted economic growth and innovation. According to the UT Health San Antonio (2020) The healthcare and life sciences industry generated over $42.4 billion and created over 50,000 jobs in 2019, further diversifying the local economy.
To increase economic diversification, Las Vegas should adopt a governance structure such as a Council of Governments to set and coordinate economic and infrastructural priorities, as proposed by the Southern Nevada Regional Study. This would help develop policies that encourage innovation and sustainable growth across multiple sectors. This initiative could create a promising environment for technology startups by providing tax breaks, grants, and access to venture capital, similar to the strategies that have driven Portland’s technology and sustainable practices.
Additionally, Las Vegas can take advantage of its abundant sunshine and continue to become a solar energy leader by encouraging the installation of solar panels and investing in more solar farms, which will not only create jobs but also reduce the city’s carbon footprint. Additionally, Las Vegas should partner with local universities and colleges to develop programs focused on industries such as biotechnology and renewable energy to also increase sector diversification, similar to the approach San Antonio is taking.
Looking to the future of Las Vegas, it is clear that economic diversification is key to creating a sustainable future. This city can leverage diversification strategies, such as those demonstrated by Portland’s investments in clean energy that create jobs and promote a sustainable environment while keeping manufacturing and distribution at the center of the economy. Las Vegas can also implement additional diversification strategies, such as those demonstrated by San Antonio’s investments in the healthcare and life sciences industries while keeping manufacturing at the center of the economy. In doing so, Las Vegas can have a robust and successful future, ensuring it remains a vibrant city that can withstand economic fluctuations. This is a call to action for Las Vegas to diversify, innovate, and invest in building a robust and diverse economy that goes beyond the glittering lights of the Strip.
