The Oakland Athletics (or A’s) have finally found a site for their new ballpark in Las Vegas, close to the Strip. The news excites many locals, from baseball fans to business owners. Moving the team may also be a significant benefit for the casino industry.
Adding another major league franchise will undoubtedly boost the local economy and bring many new visitors to the city. Many tourists will stay at casino resorts, with some choosing to gamble there. That’s welcome news to a casino economy that depends heavily on attracting out-of-state customers.
The team’s president Dave Kaval has said that the team will keep the “Athletics” name despite the move while touting its effect on tourism.
A’s Sign Deal for Strip-Adjacent Ballpark
The team has signed a binding purchase agreement for 49 acres of land west of the Las Vegas Strip at the corner of Dean Martin Drive and Tropicana Avenue. Station Casinos operator Red Rock Resorts is the current owner of the land. The deal also allows the A’s to purchase eight more adjacent acres later.
The location is ideal for visitors and residents alike, just across from T-Mobile Arena and less than a mile from Allegiant Stadium. Construction will be an estimated $1.5 billion, and the final stadium will seat between 30,000 and 35,000 people. Though the A’s will purchase the land, they will transfer ownership to the Las Vegas Stadium Authority, which also oversees Allegiant Stadium.
Kaval said that the need to find a long-term home for the team is what shifted his focus from Oakland to Las Vegas. Las Vegas is one of the fastest-growing metropolitan areas and provides better infrastructure. MLB Commissioner Rob Manfred said he supports the move and hopes for finality by the end of the year.
Casino-Resort CEOs in Favor
Many companies are releasing their first-quarter results and fielding investor questions at this time of year. MGM Resorts International and Caesars Entertainment received questions about the A’s during their earnings calls.
CEOs Bill Hornbuckle (MGM) and Tom Reeg (Caesars) provided similar statements.
Hornbuckle expressed enthusiasm at the prospect alongside concerns about taxes and public funding:
We have [given it some thought]. And obviously, given the location and the conversation about a pedestrian bridge from it to the park, which is obviously where T-Mobile sits, we think it could bring about 400,000 tourists a year to the valley that wouldn’t otherwise come. We think that’s a reasonable number that’s been created by a bunch of folks looking at it.
And so, we think that part’s accretive. We’re not a fan of any more tax dollars put into this. We yield the governor’s position and assume that this will be done responsibly for the state and ultimately for Clark County. All that said, like you, I believe it will happen, and it will be accretive, I think, to the overall visitation.
Reeg referenced his competitor’s remarks during his own call the following day:
It’s exciting to see this market continue to develop. We welcome the announcement, similar to Bill’s remarks yesterday. It’s important to us that their coming is done in a manner that doesn’t unnecessarily tax the county or have taxes that eventually get passed on to our customers. So we think there’s wood to chop there, but we are thrilled at the idea of the A’s coming to town. It provides another reason for customers to come and visit the market, and we’re going to get our share of those customers.
Casinos Not on the Hook for Stadium Funding
The A’s will pay about $1 billion of the ballpark cost. It has been a matter of debate where the remaining $500 million should come from.
Allegiant Stadium – home to the Las Vegas Raiders, another Oakland transplant – received public financing. That $750 million bill was divided between public bonds and an increase in hotel tax. That 0.88% tax currently generates about $50 million per year.
There was some concern in the casino-resort industry that another room tax could be on the way. However, that plan got shut down quickly.
The plan for the A’s ballpark now involves creating a special tax district, pending legislature approval. It will use tax increment financing, where taxes will be frozen at the current level. All newly generated property tax revenue within the area will be directed to the redevelopment agency, which can sell bonds to fund enhancements.
However, the A’s negotiations with lawmakers and business owners have included plans for alternative financing if the bonds don’t secure the needed funding. This could put nearby resorts on the hook to cover the difference. Resorts on the Strip and downtown Vegas would pay $12 million annually until the budget shortfall is corrected. That said, expectations are that the bond sales will be enough.
Another possible way to cover a shortfall would be through transferrable tax credits issued by the state.
More Visitors During Slow Months Can Help The Casino Industry
By Hornbuckle’s estimate, the ballpark could attract around 400,000 additional visitors to Las Vegas. The casino industry will welcome that as visitor numbers are still below 2019 levels. At the same time, demographics are changing as well.
Visitors tend to spend less time gambling and more on attractions and shows where baseball can fit in. While tourists spend less time gambling, they spend more money, so more visitors mean more revenue. The A’s coming to town also means many visitors will come in the slow months. Baseball season falls within some of the least visited months, including July and August, which can help casino resorts fill their rooms and, possibly, casino floors.
MLB demographics show that most avid fans are younger. Perhaps that could benefit the casino industry as it seeks ways to appeal to Millennials and Gen Z.
Furthermore, if we look at the success of Allegiant Stadium, then the estimates for the A’s ballpark could be low. Initial forecasts for Allegiant visitors were around 500,000 annually, but reports show the venue attracted well over a million visitors last year.
Las Vegas Keeps Adding Events To Match Visitors’ Interests
With a new ballpark, there’s the opportunity for special events like the All-Star Game or the World Baseball Classic, attracting even more visitors. Any of these events will add to the ever-increasing list of events the city keeps adding.
This year, the Strip will welcome the first-ever F1 race in the city. The hype has been building since the announcement, and hotels and casino resorts charge a premium for rooms and have created customized packages with up to five-figure prizes. Next year, the city will welcome the Super Bowl, the most significant sports event in the US, guaranteeing to bring millions in revenue and thousands of visitors.
Additionally, Allegiant Stadium hosts multiple international soccer games and concerts. Also, the overbudget and delayed MSG Sphere is set to open later this year and attract many tourists.