Billionaire casino and newspaper owner Sheldon Adelson is threatening to take his football and go home if Nevada legislators don?t raise room taxes in Clark County to provide $750 million toward construction costs of his proposed $1.9 billion domed football stadium that would become home to the Las Vegas Raiders and UNLV football teams.
To which we reply: Don?t forget your ball on the way out, Sheldon.
At a meeting of the Southern Nevada Tourism Infrastructure Committee this past week, Las Vegas Sands President Rob Goldstein, who indicated he was speaking on behalf of Sands owner Adelson, reportedly said, ?Not to be difficult, but we?re not negotiable. If we can?t get 750, we respectfully thank you but we?re going to move on.?
According to press accounts of the meeting, various stadium supporters went out of their way to emphasize that the tax would be paid by tourists and not residents and the room tax would increase by just less than 1 percent, costing most tourists about a dollar a night.
Yes, a dollar a night 750 million times.
Money is fungible. That $750 million could be spent on a stadium or something else. According to a 2014 economic impact study for the Las Vegas Convention and Visitors Authority, $140 million of Clark County?s room tax went into the statewide distributive school account, $130 million for parks, recreation and transportation and nearly $80 million to Clark County schools. Fully 39 percent of the room tax revenues went to fund education.
By comparison, $750 million is about half the tax hike approved by the 2015 Legislature ? the largest in history.
Some casino executives have warned that raising the room tax could make Las Vegas less competitive in the lucrative convention business. The Clark County room tax rate currently tops out at 12 percent, while top competitor Orlando?s rate is 12.5 percent. There are already plans to increase the Clark County rate by half a percent to pay for a convention center expansion. Adding another point to that makes the rate nearly 13.5 percent, and might result in reduced visitor volume and thus less revenue. Visitors have budgets, and money spent on rooms is not spent on gambling, dining and merchandise ? all of which are taxed by the state.
Strangely enough, stadium backers are now making the pitch that the tax money would not be supporting a privately owned stadium but a publicly owned stadium.
?There?s been a lot of conversation on why are we giving money to billionaires,? Steve Hill, chair of the infrastructure committee and head of the Governor?s Office of Economic Development, was quoted as saying. ?The public is not making a contribution to a privately owned stadium.?
Great, the public will be on the hook for capitalizing the project and will take the hit if the stadium operations lose money. What can possibly go wrong?
Even Adelson admitted in an interview with his own paper Sunday that stadiums don?t make a lot of money: ?The amount of money that can be made by this stadium is so small that we [Las Vegas Sands], as the largest gaming operator in the world, make that same amount of money in one or two days, maybe three sometimes.?
The stadium proponents want the governor to call a special session of the Legislature in September to pass the tax hike and create a public stadium board of directors, though some lawmakers reportedly want to wait until after the November election.
Not that anyone is trying to sway them, mind you, unless you find nefarious motives in a leaked email from an editor to reporters covering legislative races for the Adelson owned Las Vegas Review-Journal. The email, posted online by political blogger Jon Ralston, reportedly instructs reporters to ask candidates whether they support using room tax money to build a stadium, but also pointedly states that this information will not be published. Then why ask, pray tell? To determine to whom contribution checks should go?
Also, football teams are quite fickle. The Raiders moved to Los Angeles in 1982 and back to Oakland in 1995.
Oakland is still paying for the stadium renovations completed to lure the Raiders back. Now the team owners are courting Las Vegas for a new home, at least until the paint on a new stadium begins to fade and before the mortgage is paid off.
?NFL stadiums do not generate significant local economic growth, and the incremental tax revenue is not sufficient to cover any significant financial contribution by the city,? says Roger Noll, an economics professor at Stanford University.
Public funding for football stadiums is a notoriously bad economic investment ? creating part-time, minimum wage jobs that are more of a drain on a state than a boost.
Nevada lawmakers should take a pass on this terrible sports bet. ? TM