Las Vegas, the entertainment capital of the world, is gearing up for a historic event this weekend: the first Formula One race in the city since 1982. The Las Vegas Grand Prix, which will take place on a street circuit around the Strip, is expected to attract thousands of spectators, media, and high rollers from around the world. The event is also projected to have a significant impact on the local economy, especially the gaming industry, which has been recovering from the pandemic.
F1: A Game Changer for Las Vegas
The Formula One race is not only a thrilling spectacle for motorsport fans, but also a game changer for Las Vegas, according to Michael Lawton, a senior economic analyst for the Nevada Gaming Control Board. Lawton said that F1 could deliver an all-time record for gaming revenue for the Strip and statewide, as well as a $1.3 billion economic impact, equivalent to hosting two Super Bowls.
F1 is a prestigious and lucrative sport that attracts affluent and influential visitors, who are likely to spend big on gaming, entertainment, and hospitality. Lawton said that casino executives have told him that a lot of front money has been deposited and a lot of credit deployed for the race weekend. He also said that F1 could boost the international exposure and reputation of Las Vegas as a world-class destination.
F1: A Challenge for Residents and Visitors
However, hosting F1 also comes with some challenges and costs for the residents and visitors of Las Vegas. The construction and preparation of the street circuit have caused traffic disruptions and inconveniences for drivers and pedestrians. The race weekend will also see road closures, detours, and increased congestion around the Strip and downtown areas.
F1 also poses some uncertainty and risks for the economic outlook of Las Vegas, as the city faces inflationary pressures and potential slowdowns in the near future. Lawton said that Nevada and southern Nevada have yet to feel the fallout from the collapse of the Silicon Valley Bank or the liquidity and credit concerns in the financial markets due to higher interest rates. He also said that inflation poses a palpable threat to the economic prosperity of America and, by implication, of Nevada and southern Nevada.
F1: A Mixed Forecast for the Future
Lawton said that he expects F1 to be a big success for Las Vegas in 2023, but he is not sure how big. He also said that he is not sure how F1 will affect the long-term trends of visitation and gaming revenue in Las Vegas, which could face some headwinds in 2024 and beyond. He said that he expects Las Vegas to end 2023 with visitor volume up 7% for the year, but only 1.2% in 2024. He also anticipates gaming revenue to decline by 2.8% in 2024, after increasing 6.1% in 2023.
Lawton said that F1 is not a one-time event, but a recurring one that will put Las Vegas on a rotation of every six or seven years. He said that F1, along with other major sporting events and venues, such as the Super Bowl, the Sphere, and the Allegiant Stadium, will help keep Las Vegas front and center for business, leisure, and international travelers. He said that the southern Nevada economy and local tourism sector will continue to expand somewhat in 2023, 2024, and into 2025, barring any new wave of a coronavirus variant, a financial crisis leading to a recession, or a war in Ukraine.
