Las Vegas' entertainment destinations are now more important than anything other than the casino floor. Nightclubs, acrobatic shows, and now sporting events are what draw thousands of people to the Strip, giving them an incentive to spend money on everything from hotel rooms to restaurants and even gaming tables.
MGM Resorts (NYSE:MGM) has been doubling down on entertainment complexes, building the T-Mobile Arena that houses the NHL's Las Vegas Golden Knights and buying the WNBA's San Antonio Stars. Las Vegas Sands (NYSE:LVS) is building its own take on the entertainment complex with the help of The Madison Square Garden Company (NYSE:MSG), which could draw some of the biggest names in entertainment.
MSG's play in Las Vegas
A new entertainment complex is going to break ground soon just behind The Venetian Las Vegas and across the street from Wynn Resorts' (NASDAQ:WYNN) golf course. The 400,000 square foot facility will be built for both large and small concerts.
The difference between the T-Mobile Center and the facility being built by Las Vegas Sands and Madison Square Garden is that the latter will be specifically built for concerts and entertainment shows. It'll be modeled after The Forum's renovation in Los Angeles, which turned a basketball arena into a music and entertainment venue.
T-Mobile Center is built to be more flexible, hosting hockey one night and a boxing match the next. The downside of that flexibility is that you give up quality in the experience, something the new facility will try to remedy.
I think a way to look at this is that it is the next evolutionary step beyond nightclubs, which pay millions of dollars each year for DJs to perform. People will go to this venue to see a rotating slate of big names and have the opportunity to pay up for exclusive experiences in suites and private tables. Given the amount of money flowing through Las Vegas nightclubs, this could be a lucrative development.
Reinventing the north end of The Strip
Adding a concert venue behind the Venetian, Palazzo, and Sands Expo Convention Center will be only part of the reinvention in the area. Wynn is also building a lagoon that will have entertainment facilities, a new hotel tower, and a boardwalk with shops and bars. The development will be directly across the street from the new venue and create an ecosystem of attractions and event spaces for Las Vegas Sands and Wynn Resorts.
As gaming companies look for ways to attract customers, Las Vegas Sands is betting on a high-end concert experience to attract big-name concerts alongside its convention facility. Wynn is building its own high-end entertainment and convention space to piggyback on Las Vegas Sands's location. Together, they may be building a formidable entertainment destination on the north end of The Strip.