Las Vegas F1 Impact on Casino Earnings in 2024DRAFT

When the announcement for the Las Vegas Grand Prix F1 race was made in November 2023, anticipation ran high in the casino industry. The prospect of cars racing down the iconic Vegas Strip while international visitors indulged in entertainment and gambling seemed like a promising opportunity. As the race on included and casino earnings were reported, it became evident that the event had a significant impact on Las Vegas gaming revenue. In November, gaming revenue surged by over 12%, with baccarat revenue on the Vegas Strip soaring by an impressive 200%, largely attributed to the influx of international visitors for the race

Key Points:

• Financial Impact: The Las Vegas Grand Prix F1 race significantly boosted gaming revenue in November 2023, with overall gaming revenue surging by over 12% and baccarat revenue on the Vegas Strip soaring by an impressive 200%, largely driven by international visitors attending the race.
• Diverse Casino Operator Responses: While some casino operators, such as Wynn Resorts, celebrated record earnings and substantial increases in Average Daily Room Rates (ADR), others like Boyd Gaming reported minimal effects from the F1 race. MGM Resorts and Caesars also experienced varying degrees of impact, with luxury properties benefiting more than others.
• Preparations for 2024 LVGP: Casino operators are adjusting pricing strategies and race logistics for the 2024 Las Vegas Grand Prix, aiming to optimize revenue and enhance attendee experience. Strategies include normalizing mid-tier hotel room rates while maintaining premium pricing for luxury properties, alongside implementing changes in race timings and ticket pricing to attract a broader audience and streamline event logistics.

While some casino operators experienced remarkable success, others had more subdued reactions. Boyd Gaming, operating casinos in downtown Las Vegas and across the valley, reported minimal effects from the F1 race. However, notable casino giants like Wynn Resorts, MGM Resorts, and Caesars shared their insights on the race's impact and their preparations for the 2024 event.

Wynn Resorts

Wynn Resorts celebrated record earnings for the full year and fourth quarter of 2023. The Average Daily Room Rate (ADR) at Wynn Las Vegas saw a substantial 28% increase in the fourth quarter, reaching $641, partially attributed to the F1 race. CEO Craig Billings expressed satisfaction, affirming that F1 enthusiasts constituted a significant portion of Wynn's clientele. The positive response from Wynn Resorts underscores the potential synergy between high-profile events like the Grand Prix and luxury casino experiences.

MGM Resorts experienced a 22% increase in earnings for Q4 2023, with the race contributing to a $70 million year-over-year increase. However, the impact was more pronounced in MGM's luxury properties than across the board. Despite the overall financial boost, MGM Resorts acknowledges the need for strategic adjustments to maximize future opportunities associated with the Grand Prix.

“I think what this year approved is that the core contingent of people that travel to go to an F1 race is our customer.”

Caesars fell slightly short of expectations, with a 4% lift in quarterly earnings compared to the anticipated 5%. Similar to MGM Resorts, Caesars observed increased activity at its luxury casinos on the Strip and is preparing for the 2024 race. The modest lift in earnings prompts Caesars to reassess its approach and fine-tune strategies for the upcoming event. While the inaugural LVGP brought successes for some operators, not all businesses saw positive effects. Despite this, preparations for the 2024 race are underway, with adjustments aimed at enhancing overall outcomes.

Casino giants like Wynn, MGM, and Caesars plan to normalize mid-tier hotel room rates for the 2024 race, focusing high-end properties on premium pricing. This strategic shift aims to optimize revenue while ensuring competitiveness. By aligning pricing strategies with market dynamics, casinos seek to strike a balance between profitability and customer value perception.

Changes in Race Logistics

Organizers are revising race logistics for improved efficiency and attendee experience. The 2024 LVGP will feature more affordable ticket prices, a later start time, and streamlined setup, aligning with F1's standard practices for street circuits. These adjustments aim to attract a broader audience while mitigating logistical challenges encountered during the inaugural event.

Conclusion

As Las Vegas prepares for the 2024 Grand Prix, the casino industry reflects on the inaugural event's impact and implements strategies to capitalize on future opportunities. With adjustments in pricing and logistics, stakeholders aim to optimize outcomes while enhancing the overall race experience for visitors and locals alike. By leveraging insights from the past and embracing innovation, Las Vegas casinos position themselves for continued success in hosting premier sporting events like the Grand Prix.