Chicago lost its Olympic bid today, but it can take solace in the fact that it got to play host to another Olympian sporting event just three years ago. It’s an event that’s become a massive spectacle, reeling in tens of millions of tourist dollars and 100,000 spectators. Yet many people (other than U.S. mayors) have never heard of it.

Maybe that’s because it’s really, really gay. The Gay Games, held every four years, is an Olympics-like spectacular of sporting events, from cycling to soccer to martial arts. When Chicago hosted the Gay Games in 2006, Mayor Richard Daley publicly hoped it “could let Chicago show that it deserves to host the 2016 Olympics.” And just last Wednesday, when Cleveland was awarded the 2014 Gay Games, Mayor Frank G. Jackson trumpeted the win, saying his city has “tremendous assets and amenities for [gays] to enjoy”—and, of course, to spend their ample disposable income on.

Mayor Richard Daley publicly hoped it “could let Chicago show that it deserves to host the 2016 Olympics.”

"It's an honor, it's like having the Olympics," Mayor Jackson told The Daily Beast. "There's as much pride here about the Gay Games as there is in Chicago about the Olympics." Best known for Drew Carey and the Rock and Roll Hall of Fame, Cleveland's not exactly South Beach. Yet this Rust Belt city aggressively wooed the Gay Games’ organizers, pledging at the last minute $700,000 in an effort to edge out Boston and Washington, D.C.

That would be a drop in the bucket compared to the $60 million the city predicts the Games will bring in. Originally called the Gay Olympics (until the IOC served them with a lawsuit), when the Gay Games first started in 1982, finding a host city felt like begging. "We really don't see that reluctance anymore," said Kurt Dahl, co-president of the Gay Games Federation. Now, with the recession leaving municipal coffers dry, the Gay Games are many cities’ best hope for a quick, lucrative cash injection—and one of the most potentially profitable events a city can host, after the Olympics and the Super Bowl.

What started as a small gathering of no more than a thousand athletes is now a bona fide sporting phenomenon that, according to organizers, typically brings in anywhere from $50 million to $80 million. When your total operating budget for the year is $500 million, as is the case in Cleveland, that's enough to make any mayor roll out the rainbow carpet. "It's almost unheard of," says Mayor Jackson. "You'd have to go long and far to find anything like this."

As such, competition to get the games has reached Olympic proportions. Twelve cities expressed interest for the rights for the 2014 games, and four of them put in a bid. The Gay Games Federation (the Games’ version of the IOC) is already flooded with requests to host the 2018 games from cities like London, Cape Town, South Africa, and Porto Alegre, Brazil.

And no wonder. About 12,000 athletes from 65 different countries registered for the last Gay Games in Chicago; that's more than Beijing. According to the FGG, 100,000 spectators showed up to watch the different sporting events. With them came all those dollars spent on hotel rooms, restaurants, and, of course, shopping.

Just how gay are the Gay Games? As far as the sports go, not that different. Football is football no matter which team you play for. But there are some differences. The Gay Games, for example, has ballroom dancing—and the dancers are all same-sex couples. (It's up to each competing couple to decide who leads.) And forget about basketball and track and field. "The most popular sports at the Gay Games are diving, water polo, and bodybuilding," says Cyd Ziegler, who covered the last two Gay Games for OutSports.com. "Essentially anything where you have to take your clothes off."

Perhaps some of that has to do with the fact that the athletes at the Gay Games are, well, game. "As opposed to the Olympics where the spectators are completely separate from the athletes, at the Gay Games there's actually a chance that you might end up spending the night with the person you just watched compete during the day." Which brings us to the biggest difference between the Olympics and the Gay Games: Here, you don't have to qualify. Anyone who wants to play can.

There's no question that most mayors would be ecstatic to land an event that brings in millions of dollars in 10 days, especially during these hard economic times. But what do straight folks think of 100,000 gay people descending on Cleveland? "I think it's great," said Carrie Carley, a longtime resident. "I think it was pretty cool that we beat out cities like Boston and D.C. It will be good for the city financially. I have no concerns about it whatsoever."

"There's also a long-term residual benefit to hosting the Gay Games," said Tracy Baim, co-vice chair of Gay Games Chicago. "Chicago is now higher up the ladder than it used to be, especially when it comes to gay people." She says that although the Windy City has a thriving gay community, it's not exactly considered a gay Mecca. But the thousands of athletes who came to Chicago for the first time were surprised to find that Boystown, Chicago's “gayborhood,” was as exciting as New York's Chelsea or San Francisco’s Castro District. Baim counts these spectators as potential future returning tourists—a big deal considering that consumer spending by American gays and lesbians is expected to exceed $835 billion by 2011.

But it's not just about money. The Gay Games are, after all, about sports. Although no world records have been achieved as of yet, masters' records (records held for specific age groups) are broken all the time, especially in swimming and track and field. Even though "nobody's getting a contract from the NBA or getting calls from agents," said Ziegler, "at the end of the day this is for fun."

Itay Hod is a freelance reporter for CBS News where he reports on a range of topics from breaking news and politics to lifestyle and culture.