N.F.L. Stadium in Las Vegas May Be an Ego Boost, but Not an Economic One

By By JOE NOCERA of the NY Times. Excerpts:

"To justify using tax dollars to subsidize N.F.L. owners, officials invariably point to the jobs that will be added, the infrastructure that will be improved and the economic activity that will ensue.

And in almost every case, those benefits are overstated or bogus. The academic literature on this point is nearly unanimous. Brad Humphreys, who has done a number of such studies as an economics professor at West Virginia University, told me bluntly that a new stadium brings “no economic benefit.” All it does is move spending to a football game that was otherwise being spent somewhere else."

"The group then went to the tourism committee, which, of course, included one of the presidents in Adelson’s company. Not surprisingly, the committee wholeheartedly embraced the stadium idea and commissioned an economic study. The study concluded — shocker! — that the combination of a small increase in the hotel tax and the upsurge in economic activity thanks to the new stadium would cover the county’s $750 million commitment. Indeed, because it was a hotel tax, the tourists would be paying, not the Las Vegas taxpayers. It was the equivalent of a free lunch.

Or was it? Getting to that number required some rather unusual assumptions. One was that a third of the 65,000 fans at any Raiders game — including preseason games — would not be Las Vegans but out-of-towners. They would stay in a hotel for 3.2 days and spend collectively, on an annual basis, $375 million. In other words, 217,000 people each year would fly to Las Vegas for the primary purpose of watching the Raiders play football. Even if there were that many seats set aside for tourists (highly unlikely), that seems implausible.

The tourism committee also accepted assumptions that the new stadium would attract a second bowl game in addition to the one it has now — and that the attendance would double. It would attract two neutral-site college football games each year. (There are usually fewer than a dozen each year.) Oh, and it would land signature events like the N.C.A.A. Final Four, the Republican National Convention and the Academy Awards ceremony (seriously).

And then there were the job assumptions, which swayed many Democrats. “They said it would take 25,000 people to build it, when it is usually more like 3,000,” said Roger Noll, a Stanford University sports economist who advised some stadium opponents. “They claim it will add 40,000 permanent jobs,” he added. “No sane person would believe a number like that.”

Noll concluded: “The fix was in.”"

"the governor called the Legislature into a special session to ram through the bill authorizing the $750 million expenditure. Only after the session began were legislators informed that the stadium would require nearly $900 million in road improvements. That meant that other, overdue improvements would continue to be delayed."