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Casino giant Harrah's Entertainment Inc. announced 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."