Esports an industry that will help fuel Las Vegas economy, experts say

Thousands of people packed into Mandalay Bay’s Michelob Ultra Arena last month to watch fighters from Pakistan and South Korea duke it out. Spectators craned their heads and some elbowed each other over key movements, likely wondering if they could replicate the moves at home — on their gaming consoles.

Attendees were there to watch this year’s Tekken Fighting Championship, part of the Evolutionary Championship Series, or EVO, which is considered one of the largest annual tournaments for fighting games like Mortal Kombat, Street Fighter and Tekken.

EVO has been held in Las Vegas for about 10 years, except during the pandemic when it was on paused for two years. Last month marked the first in-person tournament series, and the event brought an estimated 18,000 ticket holders to the Strip.

“All the things that you’re watching become more dynamic and often more dramatic, and the convention environment provides that front-to-back for the attendees that are coming because they know all of those idiosyncrasies about as well as anyone on Earth can,” said Rick Thiher, general manager of EVO. “And we’re offering an environment where they are surrounded by like-minded people.”

The esports spectator economy has long been considered one of the fastest growing industries, attracting fans and corporate sponsors. And as more people play video games — and more content creators showcase themselves playing video games online for clicks — there’s an increased focus on how these online events can drive visitors to Las Vegas.

One prime example is the state’s recently created Esports Technical Advisory Committee, made up of industry experts who were appointed to recommend regulations around esports gambling.

Seth Schorr, a committee member and CEO of Fifth Street Gaming, said at a UNLV-hosted panel last month that there’s more room for esports to grow as the city welcomes more sports entertainment.

“When we started the esports narrative in 2015, we weren’t a sports city and it so happens that now we are,” said Schorr. “So, esports being an extension of what Las Vegas is now — we are no longer a one-trick pony but many tricks. We are now in a sports city and esports is a perfect evolution of that.”

Online gaming and offline events

The viability of Las Vegas’ esports economy can easily be seen in live events.

EVO brought nearly 20,000 tourists to Las Vegas during its August tournament as gamers sought out a chance to watch some of the best players compete.

But esports can go beyond that, said Allied Esports Entertainment Inc. CEO Jud Hannigan.

“There’s a thrill level to it,” said Hannigan. “It’s almost like if you get your name mentioned in the chat you get to see yourself there. The only other (comparison) would be like catching a foul ball in baseball.”

The New York-based company operates the 1,000-seat HyperX Arena Las Vegas, a dedicated esports venue inside the Luxor, as well as a semi-truck that operates as a mobile competition stage.

Hannigan said it looks to create extra moments of engagement for in-person experiences like putting a chat box on screen for online accounts.

Additionally, social media influencers can drive fans to Las Vegas. YouTube personality Jimmy Donaldson, known as MrBeast, and Twitch streamer Richard Belvins, known as Ninja, with more than 100 million followers and over 18 million followers, respectively, held a charity event together at HyperX in July. Meanwhile, OnlyFans model and gamer Kaitlyn Siragusa, or Amouranth, hosted a meet-and-greet at Sapphire Las Vegas gentlemen’s club this summer. And later this year, the Esports Awards will be held in Las Vegas for the first time at Resorts World.

Hannigan said there’s an opportunity for collaboration and a bigger reach when streamers and influencers visit Las Vegas.

Streamers using the HyperX facility have access to more tech infrastructure, and they can take part in sponsored events or collaborate with other players to reach new audiences.

“You gotta stay fresh,” he said. “There’s always a need for new ideas or new formats to create to engage your audiences, continue to drive and build new audiences where we’re a group that helps those folks do that. And they get to leverage the awesome set of tools we built up.”

Spending beyond the ticket

Las Vegas is not the only city to see the potential of fostering an esports economy.

Convention spaces in Arlington, Texas, Atlanta and Raleigh, North Carolina have hosted large-scale esports competitions. North Carolina even offers a 25 percent rebate on qualifying esports expenses and purchases made in the state, a move to attract more esports event organizers.

While Las Vegas is attractive to event promoters for its healthy hospitality offerings, Thiher of EVO suspects esports fans care more about the event than the location.

“This is a fandom that travels almost religiously, on a very regular basis and where all of their destination spending is spent around this hobby,” said Thiher. “They’re not necessarily looking for a trip to Hawaii or Dubai, they’re figuring out the trip to Daytona, Florida, to go to a convention tournament or heading over to Las Vegas for our experience.”

Critics have pointed out that the industry’s strongest demographic — 18 to 35 — may not be at their highest earning potential and the growing number of fans under 18 aren’t old enough to gamble or drink.

But Thiher countered that spending goes up in other areas, and players are part of a “generational fandom” — the idea that people will grow with the hobby and increase their spending power over time.

“What I’ve seen is the market doesn’t go and spend on the big shows, but they spend a ton on food and travel and what I would call entry-level experiences of locations,” said Thiher. “Mandalay Bay is a great example. I don’t think our attendee base flocked to Strip Steak on a daily basis but I think the Johnny Rockets at Mandalay Bay does more business at any point in the year when EVO is on-site.”

For the Las Vegas Convention and Visitors Authority, adding esports to the region’s event calendar helps the Strip’s economy.

A Raiders game at Allegiant Stadium and an esports competition nearby on the Strip during a weekend are likely not going to cannibalize each other, but instead, drive up the average daily room rate for that weekend or keep tourists in town for another event, said Lisa Motley, LVCVA’s senior director of sports and special events.

“Maybe you’ve got somebody who likes to play Madden who maybe comes to a football game with their father and we put a Madden tournament on top of that to be complemented and drive even incremental visitation,” Motley said during the UNLV panel. “We look at everything and we think it’s a complement.”

McKenna Ross is a corps member with Report for America, a national service program that places journalists into local newsrooms. Contact her at mross@reviewjournal.com. Follow @mckenna_ross_ on Twitter.