Share prices of several casino operators who have operations in Las Vegas went up after news broke that the National Football League (NFL) had approved the relocation of Oakland Raiders to Las Vegas, Nevada. The state government in Nevada has sanctioned public funding of $750 million towards the construction of a new stadium for the Raiders.
The Bank of America would also be funding $650 million towards the stadium as an investment after Sheldon Adelson, chief executive and chairman of Las Vegas Sands Corp. the original backer withdrew his support. The Raiders are proposing to develop a $1.9 billion stadium seating 65,000 people in Las Vegas. The team is contributing $500 million of its funds towards its development according to a report by investment firm UBS.
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The new facility will boast of state-of- the art features like a glass-domed roof and retractable doors as per a statement put out by the team. The stadium is being constructed close to the Las Vegas airport and the Strip making it convenient for both locals and visitors. It is expected that the Raiders would start playing in their new home stadium from 2020.
The relocation will bring in scores of football fans to Las Vegas, which is expected to give a significant boost to casino visitations according to industry experts. Steve Wynn, Chief Executive of casino operator Wynn Resorts Ltd. called the team’s shift to Las Vegas a ‘game changer’.
In a statement, Steve Wynn said,
You can talk about all the acts that come to Las Vegas and all the concerts, but they don’t get televised to tens of millions of people.
Share prices of Las Vegas based casino operators responded positively to the news. MGM Resorts International was up by 1 percent, resulting in overall hike of 4.5 percent for the week. Las Vegas Sands shares climbed by 0.8 percent to reach gain of 2.6 percent this week and Wynn Resorts was up by 0.1 percent for an overall weekly gain of 2.5 percent. Melco Crown Entertainment was the only operator to go against the trend, dropping by 2 percent.
Smaller casino operators also benefited from the news. Boyd Gaming Corp. was up 0.3 percent while Penn National Gaming Inc. was up by 0.6 percent. A report from investment firm Macquarie quoted industry experts as stating that the Strip was witnessing healthy growth driven largely by wealthy customers. The analysts have confirmed a positive outlook for the Strip’s casinos, highlighting the strength of Las Vegas’ underlying market.