T-Mobile Arena behind New York-New York, which was built, in part, to house an NHL team. Image source: MGM Resorts.
Las Vegas is in hot pursuit of the Oakland Raiders, and as many as nine sites have been discussed as potential landing spots for a stadium. Las Vegas Sands' (LVS -0.92%) Sheldon Adelson has shown interest, and sites owned by MGM Resorts (MGM 0.90%) and Wynn Resorts (WYNN -1.16%) have been thrown out as possible options.
The city has long been snubbed by professional sports because of the potential tie between players and gambling. But with over half of The Strip's revenue now coming off the gaming floor, the restriction may be lifting, which could bring more visitors to the city. But is it enough of an impact to care about?
The NFL's potential impact on Las Vegas
One big question we don't know the answer to: Where would the NFL stadium be built? Proposals range from MGM's land on the north end of The Strip to behind Wynn Las Vegas, or off The Strip near the Mack Center.
But we do know what traffic would look like at the stadium. Given the eight home games each NFL team plays each year, it could potentially draw about 520,000 visitors. That falls well behind the potential tickets sold for NBA, NHL, and MLB games.
|
Home Games Annually |
Seats in Stadium |
Potential Visitors | |
|---|---|---|---|
|
NFL |
8 |
65,000 |
520,000 |
|
NBA |
41 |
20,000 |
820,000 |
|
NHL |
41 |
20,000 |
820,000 |
|
MLB |
81 |
50,000 |
4.05 million |
Calculations by author.
This is also in a city where tens of thousands of people see shows every day. The Bellagio's O has been seen by over 10 million people since opening -- attendance which would take 20 years for an NFL stadium -- and that's just one of about a dozen major shows in Las Vegas.
NFL stadiums have few draws outside of football
One of the arguments for a football stadium is often the events outside of football that would draw additional fans. But a city the size of Las Vegas has limited need for a 65,000-seat stadium, especially when there are multiple arena-size venues on the Las Vegas Strip.
San Diego, which has about 1 million more people in its metro area than Las Vegas, only holds about 20 events per year at Qualcomm Stadium, including Chargers games. It's not often a monster-truck rally or Beyonce comes to town in need of a massive venue.
The impact on gaming companies isn't yet known
It may not be a negative for gaming companies to see an NFL stadium come to Las Vegas. A few more customers may pay for hotel rooms or gamble in a casino, but the impact would be minimal given the small number of people at football games. Remember that the 520,000 fans who may go to games are only about 1% of the 42.3 million people who visit Las Vegas each year -- and many fans would likely be local.
Where there could be an impact is in the investment it takes to build a stadium, and in what customers pay to visit Las Vegas. Sheldon Adelson has indicated that he'll use Las Vegas Sands' funds to build the stadium, which I think distracts from the gaming business he has built. He has also proposed that a room tax be used to help fund the stadium, which would lower the ability to raise room rates, as well as take funds that could be used to renovate the convention center. All could be incremental negatives to Las Vegas visitors.
But NFL may not be good for gaming companies
Las Vegas may be talking a lot about building a new football stadium, but for gaming companies I don't see much upside. There's not enough of a visitation draw to matter to the bottom line, and once the game is over, fans at a stadium might not be anywhere near a casino, unlike at most of Las Vegas' arenas.
Worse yet, if the tax burden to build the stadium is placed on visitors, it would be an incremental negative to gaming companies' bottom line. It may sound like a good thing to have the NFL in Las Vegas, but the facts don't make a strong case that it's good for the gaming industry.
