The second Formula One Las Vegas Grand Prix is two weeks away and operators of the Strip’s largest resorts are attempting to tamp down expectations of a financial windfall from the event.

“I would say flat-to-down a couple of million dollars versus last year,” was how Caesars Entertainment CEO Tom Reeg predicted his company’s eight casinos — all of which sit along the Strip’s 2-mile stretch of the 3.8-mile F1 circuit – would see from customers coming to Las Vegas for the Nov. 21-23 event.

But while sky-high hotel room rates and big profits for Strip resorts may be a thing of the past, tourism officials say they’ve worked out the kinks from the inaugural year, finding ways to spread the wealth to properties off the racetrack and create an experience that even fans who can’t buy tickets can enjoy.

During the company’s Oct. 29 third-quarter earnings call, he said that last year’s Formula One was responsible for $18 million of increased cash flow compared with the same weekend in 2022. He said that revenue boost was from high-end casinos — notably Caesars Palace.

He’s not alone in that view. 

On MGM’s second-quarter earnings conference in July, CEO Bill Hornbuckle raised the yellow caution flag when he mentioned “softness” in early hotel reservations for the race weekend. Three months later, during an appearance at the Global Gaming Expo (G2E), Hornbuckle tried to walk back those remarks, saying his comments were misinterpreted.

“What we have seen come through in terms of gaming and gaming revenue as it relates to last year's event, it's on par and it may actually exceed last year,” Hornbuckle said.

The company’s hotel rooms, primarily at Bellagio and Cosmopolitan, which sit along the racetrack, were booked as soon as they were put on the market.

Meanwhile MGM executives credited last year’s race with boosting casino play and non-gaming customers who fueled a portion of the company’s record $2.4 billion revenue from the Strip during the fourth quarter. 

Any financial benefits or increased business associated with F1 was not seen in other areas of Las Vegas, such as downtown, the locals gaming markets and at Strip properties south of Harmon Avenue, where the track turns off the Strip and heads east toward the start-finish line at Grand Prix Plaza.

That was primarily because of messaging by tourism officials to dissuade Las Vegas visitation unless it was to attend the Grand Prix, which, like this year, took place the weekend before the Thanksgiving holiday. The city’s professional sports teams scheduled games out of town to help prevent additional resort-area traffic tie-ups. 

In hindsight, that wasn’t a good idea.

Hornbuckle said that before F1, the weekend before Thanksgiving “was literally the second worst weekend of the year” for the resort industry. He considered 2023 as a learning experience for tourism leaders, given that “we dumped a major international event onto the city” with 18 months to prepare.

“There has been a concerted effort between casino ownership to work with the [tourism leaders] to provide an entertainment-heavy weekend,” Golden Entertainment CEO Blake Sartini said in August. 

The company owns The STRAT Hotel, Tower and Skypod, which sits at the gateway to downtown. A year ago, Golden executives said profits at the resort, despite its best marketing efforts, were lower by $800,000. 

“We are in an offensive mode and we anticipate a much better weekend for us as we continue to roll out our plan for the specific events. All of the downtown properties are involved,” Sartini said.

As a result, there is more optimism this year from gaming executives on and off the Strip.

More happening besides F1

Downtown Las Vegas casinos are hosting the free Neon City Festival on Nov. 22-24 along the Fremont Street Experience. The event includes entertainment on four stages, food and drink specials from Las Vegas restaurants and bars, a nightly fireworks show above the Plaza Hotel and Casino and special graphics shown on the Fremont Street canopy. 

The event was created by Circa CEO Derek Stevens with support from the Las Vegas Convention and Visitors Authority (LVCVA).

On the south end of the Strip, the Las Vegas Raiders will host the Denver Broncos at Allegiant Stadium on Sunday. The game will kick off roughly 12 hours after the Grand Prix’s checkered flag is waived. Broncos fans, who are known to travel with the team, are expected to fill hotel rooms near the stadium. The game is expected to boost MGM’s Mandalay Bay, Luxor and other resorts that offer paid parking for football fans and have pregame entertainment areas.

“The properties outside of the Formula One circuit didn't do well during the last race,” LVCVA CEO Steve Hill said in May. “Having an NFL game that weekend will serve those outlying properties well.”

Boyd Gaming CEO Keith Smith, whose company operates three downtown casinos, said F1 weekend a year ago provided no benefit to the company’s properties. 

“This year, F1 weekend will be stronger only because there's a home Raiders game. That will boost the weekend overall,” Smith said.

On the Strip, the Las Vegas Grand Prix is hosting a free-to-attend daytime fan experience on an empty site across from Wynn Las Vegas. Anyone, including fans not attending the race, can visit the venue, which will feature live entertainment, food trucks and F1 attractions. 

“The community engagement is our commitment to find opportunities to invite the local community to be part of the Las Vegas Grand Prix without needing a ticket to the race,” Grand Prix Senior Vice President of Corporate Affairs Lori Nelson Kraft said in August.

A new financial outlook?

One of the changes has been the build-out of the race circuit itself. 

Without having to repave the 3.8 miles like last year, work began shortly after Labor Day weekend and is taking place in the overnight hours to avoid daytime traffic tie-ups and business disruptions. Las Vegas Grand Prix sends out weekly updates on road closures detailing track construction locations.

“I think the town has learned a great deal. There's less disruption. There's less noise out there in the media about disruption,” Hornbuckle said at G2E. “We have a football game. Downtown's doing a bunch of things to activate and so it's a whole different feel going into it. So it's all good as compared to last year.”

Analysts said the Grand Prix was the reason Strip casinos combined for $821 million in gaming revenue last November, which was the Strip’s second-largest single-month total. A month later, Strip casinos set an all-time high of $905.4 million, which they said could have been attained in November if all of the Strip had been involved with the Grand Prix.

So what will this year mean financially?

A year ago, rooms at MGM’s Bellagio averaged $1,500 on race night. In September, the rate was being advertised at $800. Last month, gaming analysts asked MGM Chief Financial Officer Jonathan Halkyard if customer business would exceed or match 2023’s fourth-quarter results.

“We are excited by the high-end [play] and what that event continues to generate for us in terms of people coming [to Las Vegas],” Halkyard said. However, room costs are not at the elevated rate seen a year ago at multiple MGM properties.

Halkyard said Bellagio is drawing $2,000 a night for certain rooms given the property sits trackside along the Strip and is again offering the ultra-luxury Fountain Club viewing area.