Would a live entertainment tax keep the NBA out of Las Vegas?

Currently Nevada has a nine percent live entertainment tax, but professional sports are exempt. But that could change, as the Nevada Independent reports. 

Nevada state senator Dina Neal has introduced a bill that would eliminate the exemption from the live entertainment tax for professions sports teams. 
If you buy a ticket to a show or concert in Vegas, you are charged an additional nine percent with the live entertainment tax. But, as of now, that charge is not applied to Raiders or Golden Knights tickets. 

Unsurprisingly, the two dominant sports teams in Las Vegas are fighting this. The Golden Knights Chief Legal Office Chip Siegel argued: 

“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.”

Raiders president Marc Badain also testified that the Raiders were attracted to Las Vegas in part because of there was not a live entertainment tax on tickets. 

(It is a safe bet the $750 million in public money to build Allegiant Stadium was more attractive, but sure the lack of a ticket tax mattered.)

But both Badain and Siegel argued that losing this exemption could hurt Vegas’ chances at landing more teams. 

“It will be a deterrent effect for NBA, MLB, MLS, etc., who will consider this excise tax when they’re making their decisions,” Siegel said.

It is fascinating the Raiders and Golden Knights would argue on behalf of other leagues coming to Vegas. Why would they want the competition? It is probably better for the Golden Knights and Raiders if no other teams decide to call Vegas home. 

But is the claim legitimate? Would MLB, MLS or the NBA really avoid Vegas because of a live entertainment tax?

I doubt it. And Siegel of the Golden Knights gave the best explanation as to why:

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

The Golden Knights and Raiders are not going to take a hit on ticket sales from this tax. They are simply going to pass it on to the fans.

Neither team is going to lower ticket prices by nine percent so the fans don’t have to pay more. They are just going to add the nine percent tax on to the current ticket price.

And so will an NBA team if Las Vegas ever lands a team. 

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