Caesars is expecting big returns from the first Las Vegas Grand Prix (LVGP) Formula 1 race later this year. The long weekend of events is scheduled for Nov. 16-18, 2023.
This is typically one of the slower periods of the year in Las Vegas so any activity should increase revenue. However, the race is expected to greatly increase revenue for Las Vegas casinos and businesses.
For starters, attendance projections for the race alone are for 100,000 people each day. Additionally, there will be plenty of staff on hand to tend to the influx of visitors.
When the race was first announced last year, Clark County expected an economic impact of about $700,000 million. That has been updated to be almost twice that number with additional research.
Prognosticators are expecting the economic impact of the Las Vegas Grand Prix to double the financial effect that the Super Bowl will bring to Las Vegas next year. That’s quite the comparison as the Super Bowl is the largest game in the US every year.
Formula 1 racing and NFL fans are not the same. The Big Game will draw fans from around the country to an already busy weekend for Las Vegas. The LVGP will bring an international fan base from around the world to a weekend that wouldn’t be nearly as busy in Las Vegas.
There’s no doubt that both will have a huge financial impact on Las Vegas. If there’s any surprise, it’s how much demand there is for the first running of the LVGP later this year.
Caesars Casino in Las Vegas expects big revenue jump from F1
During its 2022 year-end earnings call in Feb., Caesars CEO Tom Reeg said that he expects the company to see Super Bowl-level revenue. This would provide the company with “5% or better in terms of EBITDA lift for the quarter that’s driven by that weekend.”
This was clarified a little during a recent discussion between Reeg, Caesars Senior Vice President of Corporate Finance Brian Agnew, and Deutsche Bank analyst Carlo Santarelli. The Caesars reps said the company is expecting a $25 million increase in cash flow from the LVGP. The duo also thinks the LVGP will have a larger change in revenue than next year’s Super Bowl.
MGM Resorts is also expecting to see a large financial bump from the LVGP but hasn’t detailed specific numbers. Both companies have been partners with the race since it was announced last year.
Ceasars and MGM casinos occupy the majority of the Vegas Strip.
Overall economic impact of the Las Vegas Grand Prix
Earlier this year Applied Analysis created an economic impact study for the Las Vegas Grand Prix. Its findings were stunning to newcomers to Formula 1 racing.
The company estimates that LVGP weekend will bring approximately $1.3 billion in spending to Las Vegas. This includes $966 million in visitor spending along with $316 million in event operations and support.
The report expects more than 7,700 people will be hired in conjunction with the race. This would account for approximately $361 million in wages.
For comparison, a similar report by Applied Analysis for the Super Bowl shows approximately $600 million in total spending. While this is also an impressive number, Las Vegas businesses already see higher Super Bowl income just from showing the game on TV.
2023 LVGP prep underway
Preparations for the race are already underway. This week F1 topped off construction on the permanent Paddock Building just off the Vegas Strip. This will be the main area of race activity.
F1 alone is contributing to the overall economy of approximately $500,000 million between purchasing this land and building the paddock.
The race is months away and continues to generate interest from businesses and fans. F1 is still adding partners for the race. Most recently, Virgin Hotels and Hard Rock/The Mirage became race partners.
Earlier this year MGM Resorts announced the Bellagio Fountain Club. Tickets for this space in front of the iconic fountains on the Vegas Strip are $11,247 per person.
Ticketholders will have track and fountain views from the club’s private indoor and rooftop hospitality decks. Additionally, guests will have access to meet and greets with F1 ambassadors along with an unlimited menu by celebrity chefs and a premium bar.
Individual LVGP race tickets are still available starting at $1,500 for all race sessions.
Just about every casino operator in Las Vegas has a premium race and hotel package. Caesars has the most expensive LVGP package available for a mere $5 million.