Las Vegas Grand Prix Brought Record Revenues to MGM Casinos, Says Company Exec
The Las Vegas Grand Prix, Formula One’s first appearance in the city in four decades, was billed as a potentially record-breaking weekend for the Nevada casinos of Sin City. However, come the start of race weekend, you’d have been forgiven for thinking that things were going awry.
Race tickets remained on sale with just days to go at rapidly falling prices. Driver’s champion and eventual race winner Max Verstappen publicly criticized the track. The practice sessions were disrupted by unforeseen cold temperatures and flying manhole covers that weren’t secured properly against the suction force of multimillion-dollar race car engines.
It would have all been quite funny if so much money and effort hadn’t been put into the preparations.
However, at least for one casino operator, the spectacular November 18 race apparently paid off big time.
MGM Resorts International executives have now revealed that the race, which turned out to be a thrilling, high-octane night that satisfied most viewers, drove MGM’s Las Vegas casinos to the highest-grossing weekend in the company’s history.
Jonathan Halkyard, MGM Resorts’ CFO, confirmed the news late last week during the Bank of America Leveraged Finance Conference.
“When you think about other events that have happened in Las Vegas over the years, and in the scale of our company, that’s quite something to have a record weekend on what was otherwise the slowest weekend of the year,” Halkyard said.
“It met our expectations in terms of casino volume, food and beverage, and most importantly, the guests and our employees, I think, had a very good experience during the long weekend.”
A New Sporting Hub
As well as record casino visits, MGM’s Nevada retail sportsbooks also saw a high level of action. The race was BetMGM’s biggest motorsport betting event, despite the heavy pre-race favorite Verstappen sealing the win in the end.
The arrival of Formula One in Las Vegas is part of a broader vision to transform the city into a major sporting hub in the western United States.
This vision includes the recent introductions of the Las Vegas Raiders and the Stanley Cup-winning Vegas Golden Knights, as well as proposals for the Oakland Athletics to move to a new stadium on the site of the Tropicana.
Halkyard says that MGM Resorts is uniquely positioned to capitalize on this burgeoning interest in sports tourism.
“As an example, when the Raiders play at home, so eight or nine home games per year, you’ll see 50% or more of the fans will be from the visiting team, making not only the game, but the entire weekend, part of their experience. These events for us turn what our CEO is calling ‘Turning a three-hour game into a three-day weekend,’” he said.
Challenges and Future Expectations
Despite the financial success, the event wasn’t without its challenges. Halkyard acknowledged that there were significant disruptions caused by the construction of the race track, facilities, and paddock, which impacted Las Vegas over several weeks and months.
This construction not only affected locals, but also MGM employees, whose commutes were disrupted by the street race circuit closing off roads and parts of the Strip. That disruption could have played into the hands of picketing casino workers in early November. Some 60,000 employees at MGM, Wynn Resorts, and Caesars Entertainment venues were very close to walking out on strike just a week before the race.
However, casino operators were able to negotiate new contracts with just days to spare before a union- imposed strike deadline.
Halkyard says that this kind of disruption and expense will not be incurred when the Grand Prix returns to Las Vegas in future years.
“This was an event that certainly had a lot of friction in the months leading up to it, a lot of construction in Las Vegas. Some of that will certainly be recurring. But a lot of it will not be as dramatic in coming years,” he said.
“F1 invested hundreds of millions of dollars in capital in their paddock facility. That, along with money that we invested to build this hospitality experience, we’ll reuse that year after year.”
While we only have the MGM execs word to go on for now about record revenues, the actual data from the various Nevada casinos and sportsbooks will be released in the coming months. We do know that even without the Las Vegas Grand Prix, Nevada’s gambling sector in 2023 was already on track for a record year.
The November data for MGM’s Las Vegas resorts will be released in their upcoming Q4 2023 report, set to be published in January 2024.