Las Vegas challenging L.A. for lucrative convention. (Up Front).

Los Angeles is at risk of losing one of its biggest and most profitable conventions as organizers of the Electronic Entertainment Expo (E3) consider moving the annual event to Las Vegas.

The three-day May convention brings 50,000 delegates to L.A. and is estimated to pump $12 million into the local economy.

Members of the E3 exhibit committee were evenly split on a vote last week on whether to make the move. The committee will make a recommendation to the organization's board, which will be in Los Angeles this week to decide the fate of the convention's location after 2006, according to Michael Collins, executive vice president of the Los Angeles Convention & Visitors Bureau.

"This is very important to L.A." said Javier Cano, general manager of the 1,004-room Los Angeles Airport Marriott, one of 45 hotels throughout the city that house the attendees. "It makes a big impact on the city."

Las Vegas is making an aggressive bid to reduce E3's move-in and move-out costs by 80 percent, saving the organizers $600,000 to $700,000 for the three-day event. Currently the Los Angeles Convention Center charges the E3 organizers $900,000 for set-up and take-down costs. In addition, the delegates could be housed in only 10 hotels within walking distance of the Vegas convention center versus the 45 hotels they now use in Los Angeles.

The potential loss is symptomatic of L.A.'s struggle to compete with other cities that have newly renovated convention facilities near large hotels. In L.A., attendees of a large convention are scattered at dozens of hotels throughout the city. Plans for a large hotel near the L.A. Convention Center have stalled over funding issues.

E3 officials would not talk about the possible move to Las Vegas. "We will stay in Los Angeles through 2006. Beyond that, we don't have any comments," said E3 spokeswoman Ashley Kim.

Las Vegas officials, who are responsible for filling 126,610 hotel rooms, have been trying to entice more conferences to come to their city at a time when tourism has taken a dip. Last year, 35 million visitors made it to the desert city, compared with 35.8 million in 2000.

Meanwhile, bigger hotels have been built in recent years. The MGM Grand Hotel & Casino has 5,034 rooms, making it one of the largest hotels in the United States. The Venetian Hotel has 3,036 hotel suites. The largest inn in L.A., the Westin Bonaventure Hotel & Suites, has only 1,354 rooms.

"This is their bread and butter," said Jack Kyser, the chief economist for the Los Angeles Economic Development Corp., about the Las Vegas bid.

History of success

E3 has been held in Los Angeles every year except one since it started eight years ago. The exception was Atlanta in 1997, but a decline in attendance prompted the organizers to return to L.A. Much of the interactive entertainment industry is located in Los Angeles and the Silicon Valley. The event typically features about 400 companies and showcases video games and other entertainment software.

"Everyone is nipping at our heels," said John Stoddard, general manager of the 900-room Wilshire Grand Hotel in downtown L.A. about the possible move.

Although Las Vegas is telling E3 organizers they will only have to pay $200,000 to $300,000 in move-in and move-out costs, Los Angeles officials said they are willing to drop all charges to keep the expo in town. Instead funds from the city's hotel tax may be diverted to pay for the move-in charges.

Bureau officials plan to ask the city to change the mechanism by which hotel taxes can be diverted to the convention center. If that doesn't happen, the bureau is willing to cover the $900,000 expense, Collins said. "We cannot see them go off because of the money they bring into the city," he said.