Can anyone support the constant waste of public money by the Las Vegas Convention and Visitors Authority?

The Las Vegas Convention and Visitors Authority (LVCVA) has been called the “marketing arm of Southern Nevada’s tourism industry.” It is funded by roughly $460M in annual revenue from hotel taxes. The Nevada Independent wrote an article in 2023 that noted how the LVCVA is supposed to represent and “ensure the public interest” with tourism-related issues. Instead, the LVCVA only promotes local resorts and has “long been a champion of throwing public money to private interests.”

This week, I saw a story that discussed the concern among state lawmakers over the LVCVA’s attitude and relationship with a company, Boring, that is currently building a 4-mile underground tunnel system. However, things have not gone exactly to plan:

• Boring has been fined over $100,000 for workplace incidents.
• Boring has had more than 20 workers injured during construction.
• Boring has continued to be issued citations for new workplace safety violations.
• Boring has been issued almost 800 environmental violations.
• Boring has had 67 different incidents of tunnel breaches.
• Boring has been heavily criticized for their lack of waste planning.

Yet, not one single complaint from the LVCVA. One lawmaker finally asked them at a meeting, why is LVCVA just giving “enthusiastic support” for Boring even with the growing list of “continuous concerns”? The answer is because LVCVA, the government group that lobbied for this plan, has helped fund the project.

It also doesn’t hurt that LVCVA can do whatever it wants with almost no oversight. That may come off like an overstatement or joke, but I mean, look at their history. The amount of money either wasted or abused by LVCVA is shocking. So let’s go over the last 20 years and see what they have been doing.

In 2009, the Nevada Policy Research Institute decided to investigate the LVCVA’s finances. They hired an investigator, filed 16 public record requests, and asked for around 60 different items. What they found is quite astonishing:

• The records reveal a pattern of “extravagant spending, lax accounting, shoddy oversight and a disturbingly cozy relationship with major contractors.”
• The records suggest that a $123M advertising contract was not effective at all.
• The records describe how state ethics laws have been “violated on several occasions.”
• The records provide evidence of violations of the “Advertising Agreement between R&R Partners and the LVCVA.”
• The records show that while state/county officials must minimize travel expenses, the LVCVA has decided to just ignore that regulation and fly first class everywhere they go.
• The records prove that the CEO of LVCVA, Rossi Ralenkotter, has accepted free travel from companies doing business with the LVCVA.
• The records indicate that a company called R&R Partners has received almost $400M in taxpayer dollars from LVCVA between 2004 and 2009.
• The records also show that after an audit found “widespread billing problems” that led to the LVCVA being overcharged since 2000, the LVCVA did not expand the audit or do anything against R&R.
• The records provide proof that the CEO of LVCVA used taxpayer money for a banquet that had “no direct connection to the LVCVA beyond bestowing an honor on Mr. Ralenkotter.”

In 2017, the Review-Journal did an investigation into LVCVA’s spending. LVCVA has a lot of fun spending taxpayer money:

• LVCVA executives spent money on top-shelf liquor and $300 steaks.
• LVCVA executives spent money on gifts for employees and first-class trips for board members.
• LVCVA executives paid at least $697,000 for alcohol, $85,000 to hire showgirls, and hundreds of thousands more for concert tickets, sky boxes, banquets, exotic car rides, and jewelry for employees.
• LVCVA executives illegally used security guards to “chauffeur top agency staff” and stole “high-end goods intended as gifts” for people who actually brought business to the city.
• LVCVA CEO Ralenkotter directed the staff to obtain airline upgrades for his wife from a British Airways executive…he then paid for the “meals and show tickets for that airline executive and his family” when they visited Las Vegas later on.

The spending abuses were so bad that Ralenkotter was brought to court on felony criminal charges (eventually settled as misdemeanors). Seriously, you should go read this Review-Journal story that detailed how often the LVCVA would demand free upgrades and many other things from British Airways. My favorite line, though, is when Ralenkotter tried to argue that his upgrade demands to British Airways were not illegal but just a “part of the (LVCVA)’s relationship building.”

By the way, later on in 2017, after the above allegations were leveled against Ralenkotter, HE GOT A RAISE from the LVCVA. Yes, his pay was bumped to $768,000 for 2016-2017. As one writer on the Review-Journal noted, this shows “how little the (LVCVA) cares about spending taxpayer dollars carefully.”

“(LVCVA) board members said not one word about the Review-Journal’s investigation…It’s unseemly to give a CEO a significant bonus when major questions loom about how often the organization’s top employees — and board members — waste taxpayer dollars…What a joke. Someone’s uncovered evidence of improper spending by the organization you oversee and you…have no thoughts?” – Victor Joecks, Las Vegas Review-Journal, 08/24/17

Not to worry, though, as the new CEO of LVCVA, Steve Hill, in 2017 “promised transparency and accountability.” Has he followed through on this? Not really.

Two years later, in 2019, the Review-Journal yet again broke a story about how, even though Ralenkotter had stepped down from the LVCVA in 2017, he was still paid by the LVCVA as a consultant. Ralenkotter then started charging the LVCVA $15,000 a month in fees “with little written explanation of what he did.” Even worse, when the current LVCVA was asked about what Ralenkotter did by other board members, he could only give “vague details about his consulting work.”

This means that not only was Ralenkotter getting $120,000 from LVCVA (for work over the previous seven months) and he had received $300,000 from public retirement benefits, but he also had several first-class trips paid for by the LVCVA that totaled $9,000.

In 2022, the LVCVA approved a three-year sponsorship deal with Formula 1 Grand Prix that would start next year. One other thing: “It will cost taxpayers approximately $19,500,000 every year.” The LVCVA claimed that this was an “investment designed to drive revenue to all corners of the city.”

A year later, Formula 1 wanted $40M for “infrastructure work,” which infuriated some within the city. Now the city must either give the $40M or cancel the event and have numerous expenses for cleanup. This led to one city commissioner asking how the city got to this point. But it will be worth it. According to Hill, this race will have an “economic and fiscal impact of more than $100M in tax revenue” thanks to visitor spending of $975M.

These numbers were put together by Applied Analysis, a group that I have written about in the past. LVSportsBiz.com wrote a great article asking how Applied Analysis can be an impartial party when they are an active business consultant of LVCVA and a “primary booster of the F1 event.” Apart from another report from the slanted, biased, idiotic Applied Analytics numbers, there were plenty of complaints and angry residents.

As Front Office Sports wrote after the 2nd race in 2024, the race “was anything but a smooth ride.” Why? Well, residents, business owners, and even hotels were in a constant uproar over the road closures and were therefore “negatively impacted by the race.” One business got so mad that they filed a lawsuit to stop the race (sorry, I meant four different businesses filed lawsuits to stop it). A hotel claimed to have lost $400,000 from the race. The actual head of Formula 1 was forced to issue an apology to Las Vegas residents about the road work issues.

Did I mention that LVCVA spent $4M worth of taxpayer money on tickets to the races? Remember those promises of an “economic windfall” and “tens of thousands of new jobs”? Well, as one racing blog put it, the actual “economic impact (fell) far below projections.” While LVCVA claims that the economic impact was between $1.3B and $1.5B, the true number from any independent source puts the number closer to $650M-$800M. Even with the hype of the second race in 2024, gaming revenues for that month were still “flat,” and hotels saw a 20% decrease compared to the prior year.

Also in 2022, the LVCVA gave over $3M in taxpayer money to host the NFL Draft. Again, this event would bring an economic impact of $419.2M. How did it do? One economist called it a “disaster for Las Vegas,” in part due to the city having 20,000 fewer hotel rooms than it would without the event. In a paper written by Frank Stephenson of Georgia’s Berry College, he found that:

“The net gain in room rentals in the 2019-2024 host cities varies greatly from a decrease of nearly 20,000 room nights in Las Vegas to an increase of about 9,000 room nights in Nashville, but in all cases is a small fraction of the claimed number of people attending draft-related events. Thus, the overwhelming majority of visitors are local residents or day-trippers and much of their spending is likely redirected from other local entertainment or dining options rather than being economic gains for the host cities.” – Frank Stephenson, Berry College, “The NFL Draft and Host-City Hotel Occupancy“

In 2024, the LVCVA spent more than $2.2M on “influencers to promote the city.” However, the LVCVA refused to tell the public how much each influencer received because LVCVA claimed it was a “trade secret.” Let me get this straight. A taxpayer-funded agency is giving taxpayer money to a contractor, and the public isn’t allowed to know who was paid what?

When the Las Vegas Review-Journal spoke to Hill, he claimed that they didn’t have to release the information because the LVCVA “had a couple of attorneys look at it.” Hill then admitted to not knowing “specifics of the influencer program” while also refusing to get someone in that program to talk to the Review-Journal. Yeah, I don’t think he is hiding anything.

Just last year, a Las Vegas Sports Business blog wrote a story on the many irregularities that had occurred when the LVCVA gave a large contract to a company that was run by the husband of another LVCVA official. The whole thing is almost comical to read about, and you should go to LVSportsBiz.com and read the multiple stories on it. Also last year, the Las Vegas blog shed light on how the LVCVA had spent more than $70,000 in taxpayer dollars for officials to go to the college football championship game in Miami. They went because they could, not because they had to go for a specific reason. Must be nice.