Las Vegas Sands Corp., the casino company controlled by billionaire Sheldon Adelson, plans to build a music venue in Las Vegas with Madison Square Garden Co., taking aim at competitors including MGM Resorts International.
The concert hall, to be located on Sands-owned land that MSG will lease under a 50-year agreement, will be the world’s largest built specifically for music and entertainment, according to a statement Wednesday. The theater will seat a minimum of 16,000 people, with a capacity goal of 17,500.
Casinos are vying for a bigger share of the faster-growing entertainment business in Nevada and globally. While visitors to Las Vegas hit a record of more 42 million last year, gambling revenue on the Strip has yet to return to its 2007 high of $6.8 billion. MGM Resorts opened a 20,000-seat venue behind its New York-New York casino last month.
Other partners in the venture include MSG executive Irving Azoff, Live Nation Entertainment Inc. and Oak View Group, a company headed by former AEG chief Tim Leiweke. MSG will own the theater, and Sands will provide $75 million to help pay for the construction of a pedestrian bridge linking to the The Venetian-Palazzo-Sands Expo Convention Center complex, according to a regulatory filing Wednesday.
Shares of Las Vegas Sands rose 1.5 percent to $46.22 at 11:14 a.m. in New York. MSG climbed almost 1 percent to $168.60.
The move is part a broader push by Sands, the world’s largest gambling company, to increase its entertainment revenue. The company is also seeking to build a $1 billion football stadium in Las Vegas and is looking to expand its night club and concert business globally, President Rob Goldstein said in an interview. Major international soccer clubs could be invited to play in the stadium.
“The goal here is a rejuvenation of our entertainment offering,” Goldstein said. “We want to be in this business in an aggressive way.”
In Macau, Sands’ largest market, the local government officials estimate the industry’s non-gaming revenue could grow to as much as $14 billion by 2025, from $6.4 billion in 2015. Authorities in the Chinese enclave are considering plans for a theme park and global sporting events, according to a local development plan posted for comment this week.
Sands is also planning to update its Las Vegas nightclubs, Goldstein said, and possibly build an arena near its Singapore casino. The new Las Vegas theater will have plush backstage accommodations and no scoreboard to block guests views.
Sands will get priority access to purchase tickets to events at the new MSG venue for its hotel packages or promotions, as well as certain rent-free use of the venue to support its expo center business.