This is the right holding. I've actually written on this subject before where I stated,
Certainly, conduct or action is not traditional verbal speech. The Supreme Court has, however, stated that conduct can fall within the First Amendment's guarantee of free speech.
I then pointed to the Supreme Court jurisprudence on the matter of exotic dancing:
Conduct, however, has always received First Amendment protection. Such as a sit-in to protest against segregation, wearing arm-bands to protest the war, marching in a parade, not saluting the flag in class, and more. The Court has even said that nude dancing is expressive conduct that is "marginally" within the "outer perimeters of the First Amendment." Barnes v. Glen Theatre, Inc., 501 U.S. 560, 566 (1991). The Court has to determine, on a case-by-case basis, whether the conduct at issue is "sufficiently imbued with elements of communication" (Spence v. Washington) and the effectiveness of those communicative elements.
The main argument from the dance club was that sex act was not defined which made the law violate a dancer's First Amendment right. More specifically, the dancer's argued that the regulation was overbroad and could potentially interfere with a constitutionally protected right. As Judge Diarmiud O'Scannlain, writing for the majority put it,
If Elvis' gyrating hips can fairly be understood to constitute a 'simulated sex act,' one can fully appreciate the potential scope of the restrictions placed on erotic dancers in Maricopa County.
The decision upheld requirements of permits for the club and licenses for the dancers, as well as requiring earlier closing times than other establishments.