I've done several membership gym / fitness clubs (similar to 24-Hour Fitness) that have a basketball court for pickup games. On a practical basis, the maximum # of people in there at any one time is about 20 (either 4 teams playing half-court, or 2 teams full-court + 2 teams waiting for their turn.).
But if you look at IBC 303.4 "gymnasium - without fixed seating", it is an A-3 assembly occupancy. It appears the code is anticipating the gym to function as a multipurpose / school assembly, and vastly overstates the real use of the facility.
Example:
A single full-size court with 5' for out-of-bounds is about 6,030 SF.
IBC Table 1004.5 Assembly without fixed seats = 6,030 / 7 = 862 occupants!
Well, maybe let's call it "exercise" in T-1004.5:
6,030 / 50 = 121 occupants - - still way over the "real life" occupant load.
Virtually every plan checker / building official has allowed a reduced design / posted occupant load in these scenarios.
When the code grants discretion to the building official, it's appropriate to exercise caution, but I'd encourage all of us not to categorically dismiss all assembly reduction requests.