MGM and Caesars Adjust Expectations for 2024 Las Vegas F1 Race Revenue

As Las Vegas gears up for its second annual Formula One Grand Prix, hotel-casino giants MGM Resorts International and Caesars Entertainment are setting realistic expectations for this year’s financial returns. Last year, the F1 debut brought a massive surge to Las Vegas, with high room rates and packed casinos generating unprecedented revenue. However, both MGM and Caesars acknowledged in their recent quarterly earnings calls that the 2024 race, set for November 21-23, is unlikely to match last year’s returns.

During the earnings call, MGM’s Chief Financial Officer Jonathan Halkyard shared that while the event will still generate substantial economic impact, it may not reach the same heights as 2023, especially since room rates are projected to be lower than last year. He noted, “While not as large as last year’s event, (F1) still brings significant economics to MGM during what has historically been one of the slowest weekends of the year.”

Setting Realistic Expectations for F1’s Impact

The initial success of the F1 debut was attributed to the novelty of the event and the draw of international tourists, many of whom are affluent F1 fans. Caesars’ CEO Tom Reeg noted that last year’s race generated an additional $17-$18 million in quarterly EBITDA over the same period in 2022. However, this year, Reeg anticipates returns to be “flat-to-down” compared to 2023, with gambling revenue being a key factor that may fluctuate due to F1’s affluent fan base.

With room rates falling by as much as 50% compared to the previous year, the overall financial boost from the F1 race is expected to be tempered. MGM CEO Bill Hornbuckle pointed out that the high anticipation for last year’s race had led to exceptional room rates, especially at luxury properties like the Bellagio, Aria, and The Cosmopolitan. For 2024, the competitive pricing landscape and a soft market for race-weekend bookings have driven rates lower.

Additionally, MGM covered costs for the exclusive Fountain Club along Las Vegas Boulevard this year, while an external entity had funded it in 2023. This shift in expenses, combined with moderated room pricing, reflects a more balanced approach to managing the event’s financial impact.

The Role of Formula One in Las Vegas Tourism

Despite the expected year-over-year revenue decline, the F1 race still represents a critical event for Las Vegas tourism. Formula One attracts international visitors who bring substantial spending power to the city’s casinos, hotels, and restaurants. As Las Vegas cements its position as a destination for sports tourism, the city benefits from a more diversified event calendar that includes not only F1 but also other major events, including the Super Bowl.

With such events, Las Vegas tourism remains resilient, and industry leaders recognize the F1 race as a value-add to the city’s economy, even if the financial returns may fluctuate. The ongoing collaboration between F1 and Las Vegas demonstrates the city’s dedication to becoming a sports capital that appeals to a diverse array of visitors.

Looking Ahead: The Future of F1 in Las Vegas

As the Las Vegas F1 race gains traction as an annual event, MGM and Caesars remain committed to supporting it and see room for growth and new revenue opportunities. While 2024 may not reach the record-breaking numbers of the debut year, the F1 partnership positions Las Vegas as a global sports and entertainment hub.

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