Study Says Cannabis Regulations Are Causing Las Vegas to Lose Tourists

(AsiaGameHub) –   Researchers presented findings at the University of Nevada’s Las Vegas Cannabis Policy Institute and International Gaming Institute’s 3rd Annual Gaming & Cannabis Policy Discussion, suggesting that Las Vegas may be experiencing a decline in tourism due to restrictions preventing tourists from purchasing cannabis in casinos.

Regulations Restrict Las Vegas Tourist Numbers, Study Says

While recreational marijuana is legal in Nevada, its use is largely confined to private spaces and licensed lounges. Notably, consumption inside casino resorts remains prohibited. During a presentation by Robin Goldstein, Director of the Cannabis Economics Group at UC Davis in California, he explained how these limitations could negatively impact Las Vegas tourism.

Goldstein based his study on insights gathered from gaming industry representatives, lobbyists, and academic experts. The research emphasized the difficulties tourists encounter when attempting to access cannabis within Nevada. According to Goldstein, statutory and regulatory obstacles can be categorized into three main areas.

The first restriction involves delivery laws, which permit cannabis shipments only to private residences and not to locations along the Strip. The second is the 1,500-foot rule, requiring that any cannabis business maintain a minimum distance of 1,500 feet from licensed gaming operations. The third barrier pertains to strict prohibitions on shared ownership, operational overlap, personal relationships, or financial connections between the cannabis and gaming sectors.

Goldstein noted that together, these regulations undermine Nevada’s tourism industry. He pointed out that the state attracts approximately 42 million visitors annually, yet many of them—especially those staying on the Strip—lack convenient access to cannabis during their primary hours of leisure and accommodation.

What Are the Financial and Social Effect of These Regulations?

As a result of these rules, the retail cannabis sector (about $540 million) and wholesale businesses (around $210 million) are collectively losing an estimated $750 million per year. Additionally, the state foregoes roughly $80 million in tax revenue—comprising $50 million from retail sales and $30 million from wholesale transactions.

In terms of tourist impact, Goldstein described several consequences. First, travelers cannot spend money at legal cannabis establishments. Second, hundreds of cannabis companies remain excluded from a market with significant potential, as Las Vegas and Clark County represent one of their largest projected consumer bases. He also warned that some tourists turn to unregulated sources, where illicit dealers sometimes offer synthetic cannabinoids or other hazardous substances instead of regulated products.

Goldstein observed that illegal cannabis markets thrive in areas near the Strip, where drug peddlers are drawn by high demand and limited legal options. Casino resorts actively work to prevent drug activity on their premises, regardless of whether it originates from employees or guests entering from outside.

Goldstein Argues Regulations Should Be Loosened

According to Goldstein, easing current regulatory barriers would benefit Las Vegas’ economy significantly. He argued that allowing greater integration between gaming venues and cannabis services would enable casinos to share in associated revenues. However, he noted that most casino operators are reluctant to permit cannabis on-site unless there is a clear financial advantage.

A possible solution, he suggested, could involve lease agreements modeled after those used for nightclubs and bars. If licensed cannabis businesses were permitted within gaming resorts, percentage-based rental arrangements could ensure property owners receive direct economic benefits proportional to business performance.

Goldstein is not alone in advocating for reform. Pennsylvania Governor Josh Shapiro has proposed that legalizing and regulating cannabis—alongside skill-based gambling games—could generate approximately $2 billion annually for Pennsylvania.