Vegas and the NBA

Today, a question from one our readers:


Ted,

Although I hope to some day, I've never had the Vegas experience. However, everything that I've heard about it and seen about it on TV leads me to believe that it would be the perfect spot for an NBA franchise. I know that the NBA summer league games there attract a lot of attention, and I really think that an NBA franchise could be a hit. I think any hope of this died after all of the problems during all-star weekend there. But, the biggest story of that weekend was Pacman, sorry I mean Adam, Jones and he has nothing to do with the NBA. Some people are worried that there wouldn't be a big enough fan base, but I disagree. I think that a lot of the travel agencies would sell tickets in their packages, and people would go to games on their trips. I think that there would be great entertainment at the shows. I think that a lot of the players would do a lot of public appearances. I think it could be very successful.


After just having been there, what are your thoughts?


Thanks for the question. I think the answer is somewhat complicated and difficult to simplify. But I will try anyway. First, some issues to keep in mind:


The NBA could easily move to Vegas and find a supportive market. Vegas is one of the most populous cities in the West, and due to the casinos and federal government, the city has a growing population with access to available and cheap land. In other words, it has a big existing market with potential for growth.


Think about it: with all the tourists visiting Vegas to gamble, the city has to have a massive population of casino workers and hotel staff looking to stay in town. Also think about the military base, Nellis Air Force Base, which just opened. The base means thousands of federal workers, people who have jobs with longevity and decent pay, will be in the Vegas area.


Also think about the land and building density throughout Clark county. You're in the middle of the goddamn desert and nothing is within 100 miles! To me that means Vegas has a lot of room to grow and as soon as they build a metro or better public transportation, property values in that town will literally sky-rocket. But for now, the availability of cheap land close to the city will prompt development to house the needs of a growing population.


So we've established that there is a potential market base for an NBA team. How about some numbers backing that up? In December, 2007, Clark County declared the population now exceeds 2 million residents. I can think of a few NBA teams that don't have that type of market right now (Bucks, Bobcats). Current estimates place growth at 3 million people by 2019, and 4 million people by 2025. Not bad, I'd say.


Vegas houses a 49 billion dollar industry which thrives on the weak dollar and attracts people from around the world. Also remember that people will always gamble because it's addictive. Population growth, especially in a place where the local economy will NOT take a significant downturn if the economy tanks, is what all sports franchises want to take advantage of. It's basically a recession proof city. So Vegas is here to stay and it will always be making money.


The rationale for a team is almost too good to be true. The area can sustain future growth in infrastructure since it has the world's largest energy producing facility; it has a growing population; it's the entertainment capital of the world; it's a 2-4 hour flight from every major American city; and it has a glamorous reputation. So why the hell not?


My sense is that Vegas will never see a professional sports team despite the characteristics I'm citing. Yes, the city is a perfect fit. Yes, Vegas would be the perfect showcase for NBA talent. Yes, Vegas would become another LA-Celebrity love-fest. But the issue of gambling and organized crime clouds Vegas in a veil of uncertainty.


What's uncertain?


1. If a Vegas team would tarnish the NBA brand in the eye's of it's more conservative fans (either existing or future fans). Most Americans deplore gambling (although most of them do it anyway). Associating the NBA with a gambling city may upset a lot of people who would otherwise follow the league.


2. If players could behave themselves in the City of Sin, avoiding the types of embarrassing mistakes made by Pacman and others. A young guy makes millions of dollars and moves to Vegas where drugs, gambling, and prostitution is pretty much legal. If that's not a recipe for trouble, I don't know what is. And last time I checked, the NBA is obssessed about the public's perception of it's players both on and off the court. Vegas is very risky in this regard.


3. If gambling and organized crime can stay out of the games played there. Like it or not, people will automatically assume that Vegas games can and will be rigged. Will this perception affect an NBA team there negatively?

Vegas, baby

After spending four days in Las Vegas, I can safely say that "whatever happens in Vegas, stays in Vegas." So instead of discussing various exploits, which included hanging out with Willie McGinest (no, I am not kidding), I will give you some thoughts on the City of Sin, raw and unedited:

1. Las Vegas represents the very best of America and the very worst of America.

Vegas hotels embody this concept. They are modern marvels, featuring the best in architecture, food, service, and amenities. They also represent some of the best commercial real estate developments in the world, bar none. For those of you who view America as a modern-day Roman empire, Vegas represents the peak of building and human triumph during this particular gilded-age. It’s as if humans have built a modern day Babylon to the god of money. You can see it soaring into the Vegas sky from the Strip. Just go there and take a look.

Where else can you find 10-12 hotels with 10,000 rooms, 5-star dining, gourmet buffets, beautiful pools, lavish casinos, and world-class shopping within a five-mile radius? Answer: no where else.

The strip is really a testament to American ingenuity or better yet, a clever response to the demand for high-end resorts and hotels. Attention to details, combined with the miraculous ability to keep visitor's costs low, make Vegas the premier attraction for vacationers and cash-heavy Americans. Want examples?

- The hotels keep everything clean and in tip-top shape
- The service is amazingly good - Polite, knowledgeable, and accessible people make these hotels run smoothly
- The food is always good, and readily available (you can eat the Bellagio buffet for 20 bucks and have some of the best food in the world)
- Small details like the amount of booze in your drinks are always thought through. Think of the movie Casino where Ace asks his chef about the blue-berries in the muffins.
- The hotel architecture is thematic and completely over-the-top; some would call it pleasing to the eye (but not me!)

Paradoxically, Vegas attracts some of the seediest elements of American society. Drugs, hookers, addicts, organized crime -- you name it. With the very best of America comes the very worst. Exploitation, greed, and sin. But a far more insidious force was in play in Vegas. Scratch the surface and the rot is exposed if you look close enough.

Everyone knows the mob founded Vegas. Everyone knows about prostitution and how it exploits women. Fair enough. Nothing new to me. What really surprised me, however, was something completely unexpected. It was the sheer amount of people visiting Vegas who a. probably couldn’t afford to be there in the first place and b. were getting ripped off by the casinos. Basically, people were getting hosed left and right. Cheap flights, deals on hotel rooms, and cheap buffets make Vegas a good destination for people on a strict budget. But the gambling at these hotels changes this picture entirely. What I saw in Vegas was people throwing away fortunes on the card-tables. And these people were not high-rollers or foreigners with money. They were regular dudes like you and me.

Even if you saved a boat-load of money on your trip-planning, how can you justify gambling thousands of dollars on Vegas card tables? A quick google search will remind you that the odds are ALWAYS stacked against you in Vegas. In other words, the house always a slight percentage edge in each of their games. That said, gambling is like throwing away your money for the slight chance you'll come out ahead. Insane, right?

The problem with Vegas is that attracts people without a lot of money who are suckered into going there with cheap flights, food, and rooms. The reasoning is simple: with the money I don’t spend on rooms and food, I will use for gambling. The Casinos basically make a wager that says: I will make it cheap and easy for you to get here, but in exchange you will gamble enough to make this arrangement profitable.
The Casinos basically hose you for four days and when you're done staying there, you've lost a ton of money. And this brings me back to my original point which is that Vegas brings out the worst in American society. On the one hand you get nice hotels and modern marvels. But on the other hand, you have casinos ruthlessly exploiting people who can't afford to be living or experiencing this lifestyle. You could call it American capitalism at its best or exploitation at its very worse. Either way, it bothered me to a certain degree.

2. Vegas attracts all sorts of interesting people and it functions as a microcosm of America. The weak dollar also makes Vegas an international hotbed of intrigue.

People watching in Vegas is like attending a zoo for the planet earth. You will see every type of person imaginable. Instead of over-generalizing or even attempting to describe what I saw, I will give you a list of my top-four favorite groups:

1. The guy's weekend. Walk around the tables in the Casino and you will quickly identify this particular group. They are rowdy and drunk and ready to high five you after hitting blackjack or seeing the dealer bust. Since most of them married, they quickly want to know “what the women are like in Vegas” since they can’t go out to the singles bars. These guys are about 30-50 and they’re there with friends, looking to win big or come home ahead. These guys also love the strip clubs, a topic they will broach without prompting at the black-jack tables. High-five! Texas rules! 2. The family vacation. Since Vegas has to compete with Indian Casinos, guys like Steve Wynn and Adelson decided to make Vegas a family destination which can attract non-gambling dollars. How do you do this? Build museums, theme parks, golf courses, shopping malls, and “stuff the kids and wife will like.” Well, it worked. Walk around Vegas and you will see 14 year old kids accompanying their parents through the hotel lobbies. This is weird because the gambling age is 21 and you’re literally not allowed on the floor unless you look over 25. Families will also haul their small kids onto the gambling floor, throwing dice or hitting the slots while junior sleeps on their back or arm. Not a pretty sight!

3. The foreign whale. The American dollar is weak relative to other currencies. Aside from boosting exports and weakening the trade deficit, the weak dollar sparks investment into the United States from outside investors or in this case, whales. Whales are a classic Vegas term, which embodies the concept of a foreign gambler who has been flown into Vegas in order to gamble obscene amounts of money. Vegas will show you plenty of that, but I’d like to add a new category: the foreign dolphin. With the dollar so cheap, Vegas is inundated with foreigners looking to spend their money. They may not be millionaires playing 10,000 dollar blackjack, but they’re staying in Vegas to have some serious fun and spend money on clothes. I call them dolphins because they are aquatic mammals smaller than Whales.

4. The addict. Sadly you will notice your fair share of addicts or desperate people. Like alcoholism, gambling can become an addiction or even a disease. And Vegas seems to attract these types of people for obvious reasons.