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Some of the biggest Las Vegas Strip property deals find transfer tax loopholes

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It used to be that if you had a casino, you owned the land beneath it. It doesn’t always work that way these days.  

Huge financial companies, real estate investment trusts, or REITs, have purchased many Las Vegas Strip casinos. But instead of developing them, they simply lease them back to the same casino to operate them. 

And as you’ll hear, those sales are legally considered non-sales —so the state has been unable to capture millions in sales taxes from them. 

But that’s not the only big real estate development on the Boulevard. 

It’s been reported that critical funding has come in for a resort-arena complex just south of the Sahara resort —and if it happens, there’s talk of it becoming home to a future Las Vegas NBA team. 

And speaking of the NBA: Houston Nuggets owner Tillman Fertitta plans to build a new casino-resort across the Strip from CityCenter.  

As the real estate reporter for the Las Vegas Review-Journal, Eli Segall has been all over these stories. He joined  State of Nevada host Joe Schoenmann for more. 

Segall said one economic factor drove many of these REIT transactions.

“Until very recently, interest rates were extremely low. So basically anyone who wanted to buy real estate, whether ranging from a 500-square-foot condo up to a 3,000-room hotel, you could lock in very cheap borrowing costs, potentially. I think that helped fuel a lot of the real estate activity that we've seen on the Strip and definitely fueled huge home buying bonanza that we saw over the last year. So that's slowed recently.” 

Earlier this year, REITs were involved in the purchases of the Venetian, the Palazzo, the former Sands Expo & Convention Center and the Cosmopolitan. Because of these deals, Segall said MGM Resorts no longer owns real estate on the Strip. 

He said it's become increasingly popular in the casino industry over the past few years, but is seen in other industries, like the Las Vegas Raiders' practice facility. 

"The company selling it obviously gets an enormous amount of money right up front," Segall said. But the downside is losing ultimate control of the real estate. 

Transfer taxes are normally paid when you're selling a property. In 2007, Nevada lawmakers reconfigured the transfer tax for these types of sales after being convinced that transfer taxes could result in taxing the same entity more than once, especially if that entity sells off different parcels to different buyers. Segall reported some two dozen of these deals worth $27 billion could have generated $125 million in taxes for the state. 

"They're structured in very complex ways that allow the buyers and sellers to claim an exemption under state law to not pay the transfer tax. It's not like there's a specific tax code that says these REIT sale leasebacks are exempt, that does not exist," Segall said. "And the law that was changed in 2007, it was interesting, and actually had to do with a lobbyist making a case to state lawmakers about all these big BLM land sales that were going on at the time."

When his initial reporting came out, neither lawmakers nor Gov. Steve Sisolak, were aware of the tax structure. 

"The higher the sales price, the bigger the tax bill," he said. "So the Bellagio alone, which was sold in 2019, when MGM sold to Blackstone, that was a $4.2 billion sale. Theoretically, it could have been over $20 million in ... tax payments, but there was literally $0 paid." 

New ground-up property

Tillman Fertitta, a Houston entrepreneur, owns the Golden Nugget casinos nationwide. He is now developing a 43-story, 2,400 room property on the southeast corner of Harmon and Las Vegas Boulevard. 

He paid about $45 million per acre, Segall reported. And that parcel has been home to so many different businesses, including a TravelLodge, souvenir shops and the Harley Davidson cafe.

"It really had nothing to do with what was there, because when someone pays that much money for a piece of property, they're just going to demolish whatever's there," he said. 

Future NBA arena?

NBA player Jackie Robinson has talked about developing an arena adjacent to the Sahara. Recently, he told Clark County commissioners he has funding for a 27-acre, $4.9 billion project that could eventually be home to an NBA team.

It's been in the works for almost a decade, Segall said, and the price has increased dramatically over they years. 

"We'll see what happens," he said. "Over the years, he's discussed numerous different financing plans. At one point, I think this was in 2017, he told me his financing was signed, done, sealed, delivered ... something to that effect. ... The next year, he said he had a loan agreement with the International Bank of Qatar. Back in 2019, he explained this very complex financing plan before the county commission and talked about moving money from one bank to another central banks in the U.S. and Europe and people in Zurich."

Eli Segall, real estate reporter, Las Vegas Review-Journal 

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Mike has been a producer for State of Nevada since 2019. He produces — and occasionally hosts — segments covering entertainment, gaming & tourism, sports, health, Nevada’s marijuana industry, and other areas of Nevada life.
Kristen DeSilva (she/her) is the online editor for Nevada Public Radio. She curates content on, our weekly newsletter and social media for Nevada Public Radio and Desert Companion.