Raiders, Golden Knights tickets could be assessed state’s 9 percent ticket tax after years of carve-out

Head out to a concert or show on the Las Vegas Strip once the COVID pandemic is over, and the operator of the event will add a 9 percent Live Entertainment Tax (LET) fee to your ticket.

But if a person attends a Vegas Golden Knights or Las Vegas Raiders home game, that fee won’t be assessed. 

Since 2015, Nevada has exempted professional sports teams from having to pay the Live Entertainment Tax, but that would change under Sen. Dina Neal’s SB367. The bill was heard Tuesday afternoon in the Senate Revenue and Economic Development Committee.

Neal said the state’s current bottoming out of Live Entertainment Tax revenues during the pandemic presents a golden opportunity for lawmakers to create tax parity and require professional sporting teams to pay the same tax that the state’s gaming industry and other live entertainment events have to pay.

“I can guarantee five years from now, they're not going to willingly walk themselves into a tax base when they're making millions,” she said.

But high-ranking representatives of the Raiders and Golden Knights said the tax would have a disparate impact on their operations, hurt local fans and deter other professional sports teams from relocating to Nevada.

“When the Golden Knights chose Vegas as the place they wanted to come, that was one of the conditions that they were relying on, and that is that there was no tax on that,” Golden Knights Chief Legal Officer Chip Siegel said. “It will be a deterrent effect for NBA, MLB, MSL, etc., who will consider this excise tax when they're making their decisions.”

Nevada’s Live Entertainment Tax was enacted in 2004 and underwent a major revision in 2015. It levies a 9 percent tax based on the admission charge for any facility that provides live entertainment with a minimum occupancy of 200 seats or individuals.

The definition of “live entertainment” is one of the more complex and heavily lobbied terms found anywhere in state law. As it currently stands, live entertainment is defined as “any activity provided for pleasure, enjoyment, recreation, relaxation, diversion or other similar purpose by a person or persons who are physically present when providing an activity to a patron or group of patrons who are physically present.”

That broad definition includes several activities including concerts, dancing (including strip clubs), acting or drama, acrobatics or stunts performed by animals or humans, comedy or magic, a performance by a disc jockey and even a paid escort who is “escorting one or more persons at a location or locations in this State.”

But lawmakers, in amending the tax in 2015, decided to make a narrow exemption for any “athletic or sporting contests, events or exhibitions” provided by a “professional team” based in the state.

Neal — who at the time the bill was passed was a member of the Assembly — said she went back and couldn’t find a reason for the exemption in legislative history. But she said that lawmakers at the time had come to an agreement “behind closed doors” to create the carve-out as a “carrot” to help attract professional sporting teams to the state.

The Democratic lawmaker said she understood the logic at the time, but said the state often runs into an issue where a business receives an incentive and never wants to give it back up.

“I understand the carrot, but they're here,” she said. “And then, I couldn't figure out what would be the legal argument for someone not to pay the live entertainment tax, and you're performing live entertainment.”

The bill itself would remove that exemption for professional sports teams, and a proposed amendment submitted by Neal would again carve out amateur and minor league sports teams. It would also lower the capacity limit in a carveout for live entertainment events hosted by a nonprofit organization, changing the capacity from 7,500 to 5,000 before the live entertainment tax has to be paid.

In the last fiscal year before the pandemic, the LET brought in more than $131 million in tax revenue to the state. But those totals plummeted during the pandemic, down to $6.2 million in fiscal year 2021, or a 93 percent drop. 

The measure was lauded by unions and progressive groups, who said it would provide a more diverse and fairer revenue stream for the state going forward.

“There is a real disparity between some groups paying their LET and some being exempted,” AFSCME lobbyist Carter Bundy said. “The more of these exemptions that we can close, the fairer it'll be for everyone.”

But representatives of the state’s two professional sports teams — the NFL’s Raiders and NHL’s Golden Knights — testified in opposition to the bill. Raiders President Marc Badain said the team specifically discussed and included the lack of a direct tax on tickets as part of the team’s decision to move to Nevada, and he said imposing the tax on professional sports teams would be viewed as a negative for leagues and teams considering expanding or moving to Las Vegas.

“Changing the terms of such a negotiated deal before any fans have even attended the game at the stadium is not the spirit of the partnership that brought the team to Nevada,” he said.

According to an analysis by TicketIQ, the estimated price of a ticket purchased on the secondary market for the Raiders in the 2020-21 session was about $1,100, though the team opted to not allow fans in games during the season. The Raiders’ own site lists the cheapest available tickets to be around $500 per seat for direct sales. 

State lawmakers in 2016 approved allocating $750 million in hotel room taxes to help the team build a new $1.9 billion stadium in Las Vegas, the largest ever public subsidy in raw dollars granted for a U.S. stadium. The team also negotiated a provision in its stadium lease allowing the team to break the contract if any “targeted tax” is applied and directly or effectively affects the team, stadium, spectators, players or team officials.

Siegel said the Golden Knights — who charge an average ticket price of about $173, according to —  believed that imposing the tax on hockey games would primarily hurt locals and not tourists, and said the proposal would have a “disparate impact” on the team.

“Vegas Golden Knight ticket sales are overwhelmingly to local buyers, and this tax will ultimately hurt these local fans,” he said. “This is not tourists that are generally going to the games, these are locals.”

Gov. Steve Sisolak reports more than $2.4 million in 2020 fundraising ahead of looming re-election bid

Democratic Gov. Steve Sisolak has reported raising upwards of $2.4 million for his re-election bid next year, an amount that roughly doubled the size of his campaign war chest to more than $4.53 million.

Sisolak’s 2020 haul, reported to the secretary of state Wednesday, is roughly 50 percent more than the $1.6 million he raised through 2019, though it remains a far cry from the more-than $11.3 million he raised during his contentious bid to win the seat in 2018. 

Sisolak’s fundraising report comes amid national unrest related to the 2020 election and follows several failed recall efforts attempting to oust the governor that came after a number of restrictions were put in place in the earliest days of the pandemic. The report also arrives as the 2021 legislative session approaches and with it, a budget crisis stemming from economic damage caused by coronavirus shutdowns

Though many of the individual contributions made to the governor’s campaign came in small dollar amounts, the vast majority of Sisolak’s 2020 fundraising — $2,356,277 — came in the form of contributions greater than $100, with 124 contributors giving the governor the $10,000 maximum donation. Taken together, those largest contributions total more than half of all the money Sisolak raised last year at more than $1.2 million. 

When accounting for other donations, including those totaling $5,000 (143 total), and $2,500 (52 total), the amount raised through top-dollar contributions alone increases to roughly $2.05 million. 

Of the largest contributions of $10,000, nearly a quarter-million came solely from gaming companies, manufacturers or trade groups, including: 

  • $70,000 from companies or properties owned or operated by Station Casinos
  • $50,000 from MGM Resorts International properties
  • $50,000 from Marnell Gaming companies, properties or individuals (owner of the Nugget in Sparks)
  • $30,000 from Las Vegas Sands properties or companies 
  • $20,000 from Meruelo Group companies or properties (owner of the Sahara in Las Vegas and Grand Sierra Resort in Reno)
  • $20,000 from companies linked to sportsbook William Hill
  • $10,000 from Golden Entertainment (owner of the Strat in Las Vegas)
  • $10,000 from the Association of Gaming Equipment Manufacturers

Together, the gaming industry formed the single largest industry bloc of the governor’s donors. However, these totals likely only represent part of the overall contributions made by gaming companies or individuals related to the industry, as it does not include contributions made by industry executives or related LLCs. That includes a number of esoterically named holding companies or development companies, which often contribute in smaller amounts.  

Business-related donors otherwise formed the second largest share of Sisolak’s biggest contributors, contributing at least 26 maximum donations for a total of $260,000, while real estate and development related donors formed the third-largest bloc with 18 contributions totaling $180,000. 

Notably absent from Sisolak’s 2020 filing are the state’s largest mining companies, which will likely find themselves at the center of a legislative fight to raise the state’s tax revenue in 2021 — a fight that comes after mining taxes first came back to the fore during a special legislative session last summer. 

Their absence, however, is likely little more than a coincidence of campaign contribution timing. State law limits maximum contributions by campaign cycle, not by year, and several major mining companies — including Newmont and Barrick Gold — maxed out their contributions to Sisolak in 2019

Other notable names for those who contributed the maximum of $10,000 include Marc Badain, chairman of the Raiders; Key and Rory Reid, sons of former Democratic Sen. Harry Reid; Clark County Commissioner Michael Naft, whom Sisolak appointed; and an LLC tied to Elaine Wynn, a businesswoman and philanthropist.

Sisolak also saw major contributions from seven companies linked to Las Vegas Golden Knights owner and Fidelity chairman Bill Foley, as well as a maximum contribution from Foley himself, for a total of $80,000. 

With no campaign to mount through the 2020 cycle, Sisolak reported comparatively little in campaign spending, about $229,900.  

Nevada Independent intern Sean Golonka contributed to this report.

Update, 1/13/21 at 5:35 p.m. - This story was updated to include more details about contributions made to Gov. Sisolak in his 2020 annual filing.

Raiders president on Nevada's fast work to land team, build stadium: 'Nobody's ever done that'

Raiders President Marc Badain said Nevada’s embrace of the team and ability to get a stadium underway in three years was “remarkable” and offered himself up as an ambassador to other companies thinking about relocating to the state.

Badain made his comments and offered an update on stadium construction to lawmakers, lobbyists and members of the Nevada Taxpayers Association during their annual meeting on Thursday in Carson City. The group, which advocates for sound tax policy, had originally opposed the major contribution of taxpayer dollars toward the stadium, saying there were better uses for the money.

“Nobody’s ever done that. It’s never happened,” Badain said about Nevada’s work to bring the project to fruition. “This is a pretty amazing community, an amazing state.”

Badain’s speech comes after more than a year of construction on the Raiders’ future stadium off the Las Vegas Strip. The cost is approximately $1.9 billion, including $750 million in hotel room taxes diverted to stadium funding — an expenditure lawmakers approved in a split vote during a special session in 2016.

He reported that the stadium’s outlook was “exceeding expectations,” noting that initial projections showed a quarter of personal seat licenses at games would be tourists and the rest locals. He now believes the tourist share will be closer to one-third.

“We’re here to maximize the public investment and drive some real economic growth with the events that happen at the stadium,” he said.

He punctuated his presentation with time-lapse videos of the stadium’s construction and images from the team’s youth outreach activities and quarterly construction worker appreciation lunches, which feature team owner Mark Davis wearing a chef’s hat.

He also said the team was trying to lure the Pac-12 college football Championship Game away from its current home in Levi’s Stadium in Santa Clara, California, and was angling for the next open slot for an NFL Super Bowl in 2025.

As for the at-times controversial community benefits agreement requiring the team to hire a certain number of minority and women-owned businesses for construction work, Badain said the project was also exceeding expectations at about 18.9 percent of all construction work.

Badain also reiterated that the team was “committed” to moving its summer training camp to Northern Nevada, but said he couldn’t provide a timeframe and that the camp would continue in its current home in Napa.

“We’ll get here as soon as we can,” he said.

But there was one topic he didn’t broach during the presentation, which included a brief question and answer period — the question of whether fans will be able to park within a reasonable distance of the stadium. Only a few thousand parking spots will be in the same parcel as the stadium, with the vast majority being at four off-site locations, according to the plan the team submitted last year.

“Nobody's allowed to ask me about parking,” he said, to laughs.