updated 8:52 p.m. ET Aug. 22, 2007

LAS VEGAS - Casino giant Harrah’s Entertainment Inc. announced Wednesday that it will partner with AEG, the company that brought David Beckham to the Los Angeles Galaxy, to build a 20,000-seat arena in Las Vegas capable of housing an NBA or NHL team.

The $500 million arena, behind the Bally’s and Paris hotel-casinos on the Las Vegas Strip, is projected to open in 2010. It’s a step toward attracting a pro sports franchise to a city that has tried to persuade reluctant league officials to look past its legalized sports betting.

The deal puts a dent in Mayor Oscar Goodman’s plans to have an arena built downtown with the help of tax breaks, but he said such plans would go forward. The site for the Harrah’s-AEG arena, a block east of the Strip, is in unincorporated Clark County, outside city limits.

Gary Loveman, the chief executive of Harrah’s, which is being bought by two private equity firms in a $17.1 billion deal, said the development was “very much a part of our master plan for Las Vegas.”

Harrah’s has yet to fully detail its long-awaited vision to link or redevelop its nine hotel-casino properties in Las Vegas, including Caesars Palace, Flamingo, Harrah’s and Bally’s, which are near the same intersection.

“It’s our ambition to create a place that transcends a series of hotels,” Loveman said. “The presence of a state-of-the-art events center of this size provides a reason for people all around us on the Strip to come into our neighborhood.”

AEG, which owns the Galaxy and the Staples Center in Los Angeles and has booked such acts as Celine Dion and Bette Midler at Caesars Palace, said it was in talks with both professional leagues and potential team owners about bringing hockey or basketball to the city.

“It just so happens 2010 is an opportune time for an expansion team in Vegas for either or both (leagues),” said Timothy Leiweke, president and chief executive of AEG.

NHL deputy commissioner Bill Daly said the arena announcement “positively impacts the prospects of Las Vegas attracting a major-league franchise” but said there was “nothing new to report” regarding league expansion or the NHL’s intentions about a team in Las Vegas.

“That is a matter our Board of Governors would have to consider at an appropriate time,” he said in a statement.

The NBA, which has appointed a committee to study a proposal by Goodman to locate a franchise in Las Vegas, postponed meetings after the league was rocked by a betting scandal involving one of its referees. The city hosted the NBA All-Star game in February, but commissioner David Stern said the league was not likely to return without a modern arena.

A key factor in the decision for AEG to build on the Harrah’s site was the “200,000 hotel rooms within walking distance,” Leiweke said. “I don’t know any place else like it on the face of the Earth.”

An annual preseason game between the Los Angeles Kings and the Colorado Avalanche in Las Vegas usually sells out, and there was good support for the Las Vegas Wranglers minor league hockey team, he said.

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