Las Vegas Strip GGR bleeds amid F1 Grand Prix lacklustre performance

Sankunni K January 13, 2025
Las Vegas Strip GGR bleeds amid F1 Grand Prix lacklustre performance

The Las Vegas Strip witnessed a decline in gross gaming revenue (GGR) for November 2024, a surprising setback for the city that has built its reputation as an entertainment and gaming powerhouse. According to the Nevada Gaming Control Board (NGCB), the Strip posted $788.7 million in GGR, reflecting a 4 percent year-over-year decline. The statewide GGR fell 4.2 percent to $1.31 billion, marking the Strip’s fifth consecutive month of decline.

A significant factor contributing to this dip was the underperformance of the second Formula One Las Vegas Grand Prix. While the inaugural 2023 event generated widespread excitement and significant economic impact, the 2024 edition fell short of expectations.

A declining trend in numbers

November’s GGR numbers reflect challenges faced by the gaming and entertainment sectors on the Strip. Slot revenue fell by 2.7 percent to $399.7 million, while table games declined by 5 percent to $389 million. Particularly concerning was baccarat, a game synonymous with high rollers, which saw an 18 percent year-over-year decline to $145.6 million.

“November’s performance reflects the challenges of sustaining momentum in a competitive and dynamic market,” said Michael Lawton, Senior Economic Analyst at the NGCB, in a public briefing. “The drop in baccarat revenue, often influenced by high-end international players, is a significant factor.”

Formula One Grand Prix: A missed opportunity

The Formula One Las Vegas Grand Prix was initially heralded as a marquee event expected to rival the financial success of its debut year. In 2023, the event generated a net economic impact of $1 billion, drawing large crowds and widespread media attention. However, this year’s race struggled to replicate that success.

Steve Hill, President and CEO of the Las Vegas Convention and Visitors Authority (LVCVA), admitted that the event did not meet expectations.

“We fell short of attendance numbers compared to last year,” Hill said in a post-event statement. “While the race remains an exciting addition to our city’s calendar, we need to refine our approach to ensure consistent growth.”

The reduced turnout can be attributed to several factors:

  • Higher ticket prices: Many attendees from 2023 were deterred by the steep price hikes.
  • Logistical challenges: Complaints about traffic congestion, accommodation shortages, and limited seating options from the inaugural race may have discouraged repeat visitors.
  • Weaker marketing: The buzz and novelty that accompanied the first event seemed to wane, leading to diminished excitement among casual attendees.

Economic ripple effects

The Grand Prix’s struggles reverberated across the city’s entertainment and hospitality sectors. Hotels, restaurants, and casinos that had capitalised on the inaugural race’s success saw softer demand this year.

“We rely heavily on major events to drive foot traffic and gaming revenue,” said Bill Hornbuckle, CEO of MGM Resorts International, during a quarterly earnings call. “When an event underperforms, it impacts not just the Strip but also local businesses.”

Despite these setbacks, local gaming markets showed resilience. The Las Vegas locals market posted $154.5 million in GGR for November, a 2.3 percent year-over-year increase and a 9.6 percent rise for the fiscal year to date.

To address these challenges, Formula One organisers have already announced adjustments for the 2025 event:

  • Affordable tickets: Introducing more general admission options to attract a broader audience.
  • Improved logistics: Enhanced road management and better coordination with local authorities to minimise disruptions.
  • Community engagement: Increased efforts to involve local residents and businesses in the event’s planning and execution.

Experts believe these changes are crucial for restoring momentum. “The success of events like Formula One lies in consistent delivery and creating memorable experiences,” said Alan Feldman, a distinguished fellow in responsible gaming at UNLV, in an interview with the Las Vegas Review-Journal. “Las Vegas has a unique opportunity to make this race a global spectacle, but it requires addressing these growing pains.”

Optimism amid challenges

Despite the dip in November’s gaming revenue, industry leaders remain optimistic about Nevada’s broader prospects. The fiscal year 2024 is already shaping up to be strong, with Nevada operators posting record-breaking annual revenues.

“Las Vegas is resilient,” Hill said. “We’re learning from these experiences and refining our strategies to ensure future events meet the expectations of attendees and stakeholders alike.”

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