Published on: May 6, 2026, 09:34h.
Updated on: May 6, 2026, 09:34h.
- Experts from a UNLV panel argued that the prohibition of cannabis in casinos adversely affects tourism revenue in Las Vegas.
- Nevada is reportedly missing out on $80 million annually in tax revenue as tourists are directed to off-Strip dispensaries or illegal sellers.
- Despite marijuana’s recent reclassification to Schedule III, Nevada’s stringent regulations remain unchanged.
The disconnect between cannabis and casinos in Nevada is detrimental to tourism, depriving the state of critical tax revenue and steering visitors into the illegal market. This was a key takeaway from the third annual Cannabis and Gaming Policy Discussion held by the UNLV International Gaming Institute alongside the Cannabis Policy Institute last Friday.
As Las Vegas experiences nearly 8% fewer visitors in 2025, and emerging competitors like prediction markets vie for attention, Seth Schorr, CEO of Fifth Street Gaming, emphasized that casinos require every available tool to attract the next generation of tourists. He proposed that cannabis could serve as a marketing advantage, not a miracle solution, that the industry is currently prevented from leveraging.
Schorr highlighted that while gaming revenue appears to be on the rise, it conceals a significant issue: casinos are extracting more from their loyal players, while the average tourist continues to disappear. He suggested that permitting cannabis lounges, cannabis-friendly hotel environments, or even simple delivery options to resorts could potentially reverse this trend. He acknowledged that some operators may decline to participate, but many would likely innovate, with some possibly developing cannabis-oriented hospitality brands.
Since Nevada legalized medical marijuana in 2013, the Nevada Gaming Commission established rules preventing state-licensed casinos from allowing marijuana on their premises. Furthermore, any business selling cannabis must be at least 1,500 feet away from a licensed casino.
These regulations remain unchanged owing to federal classification of marijuana as a controlled substance. Recently, though, it was moved from Schedule I, which suggests it has no medical use, to Schedule III, where research is permitted.
State Senator Rochelle Nguyen (D-Las Vegas), a leading voice for cannabis reform in the Nevada Legislature, branded the regulations as “absurd,” as they inadvertently funnel tourists into the illegal market. This not only jeopardizes public safety but also denies the state considerable tax revenue, she stated.
Assemblyman Max Carter (D-Clark County) echoed her sentiments, mentioning his bill to allow cannabis delivery to non-gaming businesses on the Strip, which failed due to pressure from casino representatives concerned about potential license losses under federal banking scrutiny.
Canna-challenges
A recent study by Robin Goldstein from UC Davis evaluated the financial impact of these regulations on Nevada’s legal cannabis industry, estimating a loss of $750 million in retail and wholesale revenue annually, resulting in approximately $80 million in lost taxes for the state.
Tourists seeking cannabis must either travel off the Strip or purchase from unregistered street vendors, a situation that Goldstein described as both dangerous and economically detrimental.
Former MGM Resorts executive Feldman reminded the panel that casinos have historically resisted new trends—such as nightclubs, online gaming, and tribal casinos—only to embrace them when demand became undeniable. He noted that many operators are already aware of potential locations for cannabis lounges on their properties, should regulations change.
The consensus among the panelists was clear: the current situation is unsustainable, and progress requires collaborative efforts from legislators, the Gaming Control Board, the Cannabis Compliance Board, and ultimately, the federal government.
Until that happens, Nevada’s most influential industries remain divided by a regulatory divide that is widely regarded as outdated.