LAS VEGAS, NV: The Las Vegas Convention and Visitors Authority said that each day, 500 fewer cars are coming to Vegas. That’s 500 sets of guests who won’t be eating out tonight, going to a show or losing their life savings at the tables.
There are many reasons. Of course, everyone is gong to blame the parking fees. However, parking is a flat rate. The reason the big players stopped coming to Vegas is because their is a new hotel tax to pay for the stadium.
$750,000,000 is a Huge Burden on Every Hotel Room in Las Vegas
The Stadium placed a tax on every room in Las Vegas. This disproportionately affects the "High rollers" more than the discount shoppers because its a percentage. If your room is $50, you don't care if taxes are $10. But if your room is $5,000, that is $1,000 that you cannot use to gamble, eat, play or drink. It goes directly to the Stadium. Again, you won't care if it's $10. But $1,000 is enough money to make you want to stay home and spend your money elsewhere.
The Stadium Put a Tax on Casinos that Were Already Struggling After Oct 1
One look around Las Vegas shows a slough of casino failures: The Rio, Caesars, Bellagio, MGM Grand... coming up will be The Cromwell, Planet Hollywood and The Mirage. But all these deals have one thing in common; they are all lease-back deals. A lease-back is when a company suddenly becomes the tenant in their own building. This is a tactic used when a company needs to free up cash.
For example, The Bellagio sold to Blackstone Group for $4.25 billion plus an annual rent of $245 million for 30 years. They have the option to extend or break the lease in 10 years and again in another 10 years. The plan is to continue to offer gaming services while paying $20.2 million a month for rent and use the extra cash to expand in Asia.
The casinos are bailing out of Vegas while the stadium is being paid for through room taxes. MGM must feel that here is no way for the casino to be competitive with room rates with a $750,000,000 tax burden. The CEO of MGM says his plan is to buy back the Belagio in 2025.
How Does it Look When you Make Visiting Guests Pay for Your Grand Stands?
Visitors from other cities are expected to pay for a stadium even if they hate sports. And visitors from other cities who hate the Raiders are expected to pay for a competing team's stadium. Thats utterly moronic.
A tax penalizes your ballers more than your discount shoppers. You will get more guests who spend less money and less guests who spend more money.
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