Casino Revenue Soars as Vegas Grapples With Complex F1 Legacy
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The Las Vegas Strip recorded impressive growth in gaming revenue in November 2023 as Formula 1's whirlwind motoring circus sped into town.
The 4-day event, which attracted around 300,000 spectators, led to a boom in casino gambling, with the Nevada Gaming Control Board recently announcing gaming revenue of over $820m in November - a 23% increase year-on-year.
The increase forms part of the often-touted figure of $1.2bn that F1 owners Liberty Media predicted would be generated as a result of the showpiece event.
However, as the latest round of road closures sweep through the city in preparation for February's Super Bowl, there will be an unwelcome sense of déjà vu for locals who are groaning under the weight of constant disruption.
52 days on from Vegas's red-letter day of 2023, local residents and businesses continue to voice disquiet about a feeling that they've propped up a top table they weren't invited to dine at.
And, with a 10-year agreement to stage the Grand Prix signed, local businesses and residents are increasingly expressing concerns about an event they worry will irrevocably change the face of Vegas.
Now, with around 2 months distance and economic impact studies starting to accumulate, it's worth assessing the complex legacy of F1 in Vegas as the champagne hangover finally starts to wear off.
Crunching the Numbers
November 2023 represented the Strip's second-most profitable month of the year by casino revenue, topped only marginally by a successful July.
With an increase year-on-year of 22.63% (to be precise), F1 predictably contributed to a rise in spending on the casino floors as slots play grew by 26% from October, and table games like baccarat and blackjack by 68% on the previous month.
In an interview with Yahoo Finance on the week of the Grand Prix, Greg Maffei, CEO of Liberty Media, claimed the event was "injecting something like $1.2 billion into the local economy."
It will be the largest sporting event ever done in Vegas...injecting something like $1.2 billion into the local economy.
Maffei, who had previously apologized to Vegas residents for the disruption caused by the race, told Yahoo, "It shows you never apologize. I was attempting to be pleasant and thankful for all the forbearance that they [locals] had to go as we've constructed things. We are not the only construction going on in Vegas, but we were a major element."
Further questioned on fears that the revenue generated was leading to a top-down, winner-take-all-economy, Maffei responded, "I think Vegas is going to like this a lot. It will be the largest sporting event ever done in Vegas. Bigger than the Super Bowl. You're seeing the benefits go out to cab drivers. You're seeing go to restaurants who are having upcharges. So I think there's going to be a lot of revenue shared by many in the community, and we hope that will do something for the benefit of all."
Local Business Voice Concerns
On the track, the event was undoubtedly a success (errant manhole cover aside), with recently-crowned 3 times world champion Max Verstappen winning one of the year's more eventful races.
Verstappen, a modern great of the sport, had started the week complaining to ESPN that the event was "99% show, 1% race" and ended it crooning "Viva Las Vegas" as he started out on a celebratory victory lap.
Off the track, local businesses continue to tell a different story.
In an open letter, Gino Ferraro, owner of Ferraro's Ristorante, a mainstay of Vegas's culinary scene for nearly 40 years, claimed the event had cost his business 'in excess of over 2 million dollars in revenue'.
Ferraro added, "Through the construction for F1, Las Vegas was crippled for 9 months... we had thousands of tourists and locals complaining about traffic, as well as the increased cost of cabs and Uber rides."
"We employ close to 80 people and their pay was 20% less than last year. Who will reimburse Ferraro's and our staff?"
Echoing sentiments now commonly expressed by local businesses across Vegas, Ferraro asks, "Who profited? A few hotels, it doesn't make sense. How do we know what the ROI is with all that was spent to destroy the Strip, its surroundings, and ultimately people's lives!"
Similarly, in an interview with LVSportsBiz.com, Wade Bohn, owner of Jay's Market on the corner of the busy Koval Lane, claimed a significant drop in revenue from around $8.5m in 2022 to under half at $4.2m for 2023.
If this happens again next year, I will be out of business one hundred percent.
Bohn, alongside other business owners, is now seeking compensation from Clark County, saying if the 2024 race were to have a similar impact, "I will be out of business one hundred percent.”
While these are just two examples, they form part of a swelling backlash against the F1 event that is growing among small businesses and Vegas locals alike - particularly online.
There is a growing feeling that in order to achieve consent from locals, changes will need to be made - and abstract financial arguments just won't cut it.
While a huge growth in casino revenue is one thing, Las Vegas locals will continue to call that more must be done to ensure the benefit of the sporting spectacle for all.
Moreover, those economic impacts, predominantly favorable to the event, will continue to come under scrutiny for the time being while numbers are far from confirmed.
Speaking to KNTV Las Vegas, Stephen Miller, Professor of Economics at the University of Nevada, also questioned the overall economic success of the event, saying, “When rooms went on sale, the prices were astronomical, and over time, they trended downward”.
“Downward in price suggests that maybe the initial demand was overblown” - the plummeting of ticket prices in the weeks preceding the event would also appear to support this suggestion.
Overall, experts still consider it too early to determine the full economic impact of the race.
A Complex Legacy
Vegas, for decades the world's casino capital, is rapidly diversifying is offering to become a sports & leisure powerhouse across the board.
Still the destination for boxing's biggest bouts, the city now also boasts six minor league teams, four major league sports teams (Athletics, Raiders, Golden Knights, Aces), is the home of MMA giant UFC, and the introduction of an NBA franchise in the near future seems inevitable.
Vegas's Allegiant Stadium will play host to Super Bowl LVIII next month, and soccer gets the Sin City treatment in the summer with three Copa America games being hosted at the same venue.
In other words, F1 - the world's fastest growing sports league on social media - is here to stay.
However, as concerns continue to be raised and thoughts turn to the specter of perennial disruption, complaints from locals left to sweep up the debris of motorsport's premier contest will continue to plague race organizers.
As Ferraro himself implores, "I strongly believe we need to rethink the strategy on how we can accommodate our visitors prior to the race and during. We can't destroy the city for one weekend."
