Tourism and gaming are the largest economic powerhouses in Las Vegas, bringing in the most money for the regional economy. According to data from the American Gaming Association, the casinos industry’s economic impact in Nevada in 2023 totaled $59.4 billion, and the industry was responsible for supporting more than 330,000 jobs. These figures highlight how important tourism is to the Las Vegas economy. Even though this sounds good in hindsight, the overdependence on tourism creates a challenge for the overall health of the Southern Nevada economy when gaming revenues falter.
Imagine going “all in” in poker, a very risky situation right? Well, that’s the state of Las Vegas’s economy as it is going “all in” on tourism and gaming, making the region very vulnerable to economic shocks. For example, Tourism Analytics (2021) reports during the pandemic, tourism dropped 55% in visitor volume, leading to employment rates in tourism sectors dropping over 32.5%. During just a 78-day casino closure Las Vegas lost over $6.2 billion. Furthermore, the Las Vegas Global Economic Alliance (LVGEA) released “Vision 2025: A Comprehensive Economic Development Strategy” highlighting the most important goal for Southern Nevada is to promote a resilient and diverse economy. Moreover, a Southern Nevada regional study prepared by the Brookings Mountain West, the UNLV Center for Business and Economic Research, and the UNLV Transportation Research Center corroborates that Southern Nevada lacks a governance structure to coordinate needed economic and infrastructure priorities. The report notes Southern Nevada’s application for the U.S. Economic Development Administration’s (EDA) Build Back Better Regional Challenge grant offering millions of dollars in funding to support regional economic development initiatives. Even though the grant did not succeed, it still marks an effort to “get in the game” for federal funds to help regional economies.
Even post-pandemic, Las Vegas is finding itself increasingly reliant on the tourism sector. According to the Las Vegas Sun (2024), the Increasing Our Nation’s Value Through Economic Support and Tourism (INVEST) Act, will generate an enormous amount of money for tourism. Nevada Business (2023) reports that the Destination Development Demonstration (3D) grant seeks to bring funds to Nevada’s rural towns to help the long-term development of tourism in the area. Even though such funding creates a positive short-term impact it reflects our dependency on the tourism and gaming sector. The Las Vegas’s tourism and gaming industry continues to create record breaking revenues and we should never fail 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 simultaneously diversifying our economy in sectors where it is needed.
A recent example of this is the success of sports/entertainment investments. For example, the Center for Business and Economic Research at UNLV (2023) quantifies that sporting events in Las Vegas generated $1.845 billion in direct output only in the fiscal year 2022. This is why Las Vegas has been investing heavily in sports such as the teams in the National Football League, the National Hockey League, the Women’s National Basketball Association, and the United Soccer League – all added just in the last decade.
In order to further bolster its economic resilience Las Vegas should implement successful strategies employed by peer cities such as Portland and San Antonio. For example, Portland’s distribution and diverse manufacturing economy is the economic center for Portland. Although Portland’s center of economy is distribution and manufacturing, the city has not failed to diversify its economy. For instance, Portland’s city council approved the enactment of the Climate Investment Plan (CIP) which will invest over $750 million in promoting climate justice and help Portland reach its five-year target of net-zero carbon emissions. According to the Portland Economic Development Strategy, Portland has created a goal to produce 10,000 jobs in five years through investments in green technology and sustainable practices further exemplifying a successful diversification strategy.
Another example is San Antonio, as the core of the economy is the manufacturing industry. However, this city also works to diversify its economy as San Antonio’s direction into the biomedical sector, and partnerships with educational institutions, have stimulated economic growth and innovation. According to the UT Health San Antonio (2020), the healthcare and biosciences industry generated over $42.4 billion and created over 50,000 jobs in 2019, continuing to diversify the local economy.
To increase economic diversification, Las Vegas should establish a governance structure like a council of governments to create and coordinate economic and infrastructure priorities as proposed by the Southern Nevada regional study. This would help develop policies that fosters innovation and sustainable growth across multiple sectors. This initiative could implement a promising environment for tech startups by offering tax breaks, grants, and access to venture capital, similar to the strategies that advanced Portland’s technology and sustainable practices.
Additionally, Las Vegas can utilize its abundant sunshine and continue to become a leader in solar energy by promoting solar panel installations and investing in more solar farms, which will not only create jobs but also reduce the city’s carbon footprint. Even more than this, Las Vegas should partner with local universities and colleges to develop programs focused on industries such as biotech, and renewable energy to also increase the diversification of sectors similar to the approach that San Antonio is taking.
When looking toward the future of Las Vegas, it becomes clear that economic diversification is key to creating a sustainable future. This city can use diversification strategies shown by Portland’s investments in clean energy which is creating jobs and fostering a sustainable environment while having manufacturing and distribution as the center of the economy. Las Vegas can also implement additional diversification strategies shown by San Antonio’s investments in the healthcare and biosciences industry while having the manufacturing industry as the core of the economy. By doing so, Las Vegas can have a resilient and prosperous future, ensuring it stays a vibrant city capable of withstanding economic fluctuations. This is a call to action for Las Vegas to diversify, innovate, and invest in building a robust and diverse economy that extends beyond the glittering lights of the Strip.
