Las Vegas bosses were delighted when Formula One decided to host a race down the famous Nevada “strip”. When the business community in the gambling capital of the free world learned the projected overall economic impact of the inaugural race in ‘sin city’ was $1.3bn, all objections to the chaos setting up the event would cause were quietened.
A similar economic impact study was conducted by Applied Analysis for the Super Bowl taking place in February 2024 at Allegiant Stadium in Las Vegas. That report showed that the NFL’s championship game and events tied to it would leave an economic impact of just half that of Formula One in the region of $600 million.
F1 “gangster” shakedown of Vegas venues
As TJ13 reported in August Formula One was facing a backlash from a number of Las Vegas venues who accused the sport of a “gangster” style shakedown.
F1 had been demanding $1500 per seat from non-partners such as Planet Hollywood amongst others to ensure the view of the race track was not obscured by lighting or hoardings. For a venue with around 2,000 seats this would have resulted in a bill of around $3m.
The number of seats had been calculated by F1 representatives based on the capacity of the venues according to the fire code certifications.
Realising the look for the sport would be bad were Las Vegas high profile names to call out the ‘protection’ money and bad mouth the sport, F1 backed down and agreed a one off $50,000 fee for each of the non-partner venues.
Smaller venue fee now levied
“This venue fee is much smarter,” a source close to restaurant owners said, adding, “It’s much more in line with what the Super Bowl will charge” when it is played in Las Vegas in February next year.
F1 does charge similar fees at other street circuits such as Monaco, but Las Vegas venue owners were concerned that such high fees would deter regular gamblers from attending several times a year to spend their money.
Now the $50,000 venue fee will not only provide an unobstructed view of the race but a live feed of the entire race action direct to the venues to broadcast on their banks of TV’s.
Las Vegas has been building the infrastructure for the race for 3 months now and the work has caused chaos in ‘sin city.’ The strip which will be closed for several days is not like the one lane each way road in Monaco, it is in fact a six lane highway and a key arterial route around Las Vegas.
Impact on Casino vast income unknown
Locals have been voicing their concern over the disruption set to continue as it does in Monaco for 3 months a year until 2032.
With 150,000 rooms available for booking in Las Vegas, it is expected most of them will be taken by F1 fans attending the race.
It seems the small matter impact on the Casino’s whose lifeblood is the people who visit Vegas – may have been overlooked.
F1 fans are not gamblers en masse and the Casino’s may find themselves relatively empty as the fans shun the slot machines and the tables for other activities, such as drinking and partying as is usual at most F1 events.
F1 unprecedented investment in a race
Liberty Media has invested over half a billion dollars in the paddock and entertainment facilities, though they do control the ticket sales and around 75% of the revenue from these will go direct to FOM’s coffers.
This is a big gamble move for Formula One as the sport has never previously been the host and promoter of an event of this scale.
In addition to the year one logistical cockups – which are inevitable – fans may discover their hotel cannot offer them hospitality services as the unionised staff a=have voted to strike during the weekend.
Many of the cooks, porters, waiters, cleaners and other staff are at the end of their five year contracts and are demanding an improvement in the terms before signing one for the next half a decade.
Strike action threatens F1 Vegas race
If guests cannot get the services they require from their hotels, they could demand refunds costing the F1 ‘partners’ millions in refunds as well as creating a bad reputation for the event in its inaugural season.
The stakes are high for Formula One, but the cost to the employers of the big pay rises demanded will stretch five years into the future and they may decided the strike is the lesser of two evils.
Whilst F1 is not to blame for the potential debacle, host cities need to be better prepared and knowing F1 was coming to take over the town, maybe the big hotels and restaurants should have ensured new contracts were signed a year ago.
MORE F1 NEWS: Las Vegas F1 cancelled?
Las Vegas, the city synonymous with entertainment and hospitality, is on the brink of an unprecedented strike that could significantly disrupt the Formula 1 Grand Prix scheduled for 16 November.
The Culinary and Bartenders Union, which represents 35,000 members across 18 properties, has warned of a strike if its demands for better pay and conditions are not…READ MORE ON THIS STORY