Once a skeptic, MGM Resorts now seeking ways to benefit from Las Vegas’ $1.9B stadium

Once a skeptic, MGM Resorts now seeking ways to benefit from Las Vegas’ $1.9B stadium

  • Howard Stutz
July 29, 2019 11:00 PM

Based on Jim Murren’s enthusiastic approach last week toward the $1.9 billion Las Vegas Stadium, one might think MGM Resorts International was a long-time supporter of the project.

That wasn’t the case.

The $1.9B Las Vegas Stadium on June 23, 2019 /Photo by Howard Stutz

In 2016, MGM executives were dead set against the 65,000-seat stadium if the plan was to siphon away funding for a $1.4 billion expansion and renovation of the Las Vegas Convention Center. That plan was pushed by stadium proponent Las Vegas Sands Corp., a long-standing critic of the Las Vegas Convention and Visitors Authority.

The proposal was rejected – the Southern Nevada Tourism Infrastructure Committee gave the LVCVA the money needed for the convention center – and MGM Resorts joined the stadium bandwagon.

On MGM’s second quarter earnings conference call last week, Murren said the casino giant is devising ways to benefit financially from the stadium, which is under construction on the west side of Interstate 15 directly across from Mandalay Bay.

And why not?

The glass-domed facility, the future home of the NFL’s soon-to-be-relocated Oakland Raiders, is in the neighborhood of MGM’s commanding south Las Vegas Strip presence. The stadium, which will also house UNLV’s football team, college football bowl games, and nearly 50 special events to be produced by an affiliate of entertainment giant AEG, is less than two miles away from eight MGM properties totaling 26,000 hotel rooms.

The company’s 10 total Strip area resorts are contributing the largest slice of the hotel room taxes used to fund the controversial $750 million in public financing that is helping pay the stadium’s construction costs. In 2016, state lawmakers raised Las Vegas Strip room taxes 0.88 percent – roughly $1.50 per night.

With a year to go before the first football game is played, MGM’s chairman and CEO reminded everyone the stadium was “literally in our backdoor of Mandalay.” Developers will close the Hacienda Avenue overpass to vehicles, creating a pedestrian bridge that practically leads to the front doors of Mandalay Bay and Luxor.

MGM CEO Jim Murren (r) and NBA Commissioner Adam Silver

Murren said a team led by MGM President Bill Hornbuckle is in the early stages of plans to “maximize the foot traffic … into Mandalay Bay, Luxor, (and) Excalibur in creating this pedestrian experience.” That effort leads to pre-game tailgate areas and other festivities.

“People are going to congregate around our properties, walk across I-15 into the stadium, and walk back,” Murren said.

Three years ago, MGM wasn’t even sure if the stadium was necessary. Hornbuckle, then a member of the tourism infrastructure committee, said event projections for the stadium were overstated, adding that Las Vegas already gets “the lion’s share of what’s out there.”

And, less than a year ago, Hornbuckle was critical of the parking plan, which involves renting satellite parking lots and busing fans to the stadium. He feared the idea would “choke out” MGM customers.

That notion is now in the past.

“Raiders Stadium will be a catalyst for our south Strip resorts, especially Mandalay Bay, as we will take full advantage of its location by hosting the most awesome tailgating experience before and after all of the events at the stadium,” Murren said.

In many ways, the stadium falls into MGM Resorts’ endeavor to become one of the most visible gaming companies in the sports realm.

A deal with Major League Baseball had the MGM logo displayed at All-Star Game in Cleveland and on Oakland A’s uniforms during a season-opening series in Tokyo. During the National Hockey League Playoffs, it was hard to miss MGM’s logo on the ice in arenas. The Vegas Golden Knights play at MGM’s T-Mobile Arena, which the company operates with AEG.

Last year, MGM bought San Antonio’s WNBA franchise and moved the team to Las Vegas and into the Mandalay Bay Events Center. The Las Vegas Aces hosted the WNBA All-Star Game last weekend. Earlier this month, the company hosted the MGM Resorts NBA Summer League, which hit new attendance records during its two-week run.

As for sports betting, the company has data sharing and marketing agreements with three professional sports leagues, operates sportsbooks in Nevada, Atlantic City, and Mississippi, and last year created a partnership with UK-based GVC Holdings for a U.S.-based sports wagering platform.

MGM’s efforts to get behind the stadium is a reasonable move.

Public funding of stadiums has long been controversial in the U.S. and the $750 million price didn’t come without heated debate and taxpayer concerns that the money could be used in other areas.

However, the stadium is now the centerpiece of more than $16.2 billion in Las Vegas tourism-related construction projects scheduled to be completed over the next five years.

“The amount of infrastructure being invested in Las Vegas by so many different parties is going to benefit the entire town, and that’s good for us,” Murren said.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.