MGM, Caesars concede 2024 F1 race unlikely to replicate last year’s returns

The Strip’s two largest hotel-casino operators are acknowledging that the upcoming Formula One race will not provide the same boost to their bottom lines as it did in 2023, when the event debuted in Las Vegas.

During quarterly earnings calls this week, top executives with MGM Resorts International and Caesars Entertainment told investors and market analysts that the financial returns from the 2024 Las Vegas Grand Prix are expected to fall short of last year’s results. Both companies said they are anticipating multimillion-dollar year-over-year declines from this year’s race, which takes place Nov. 21-23.

But given that Formula One events typically attract an affluent customer, neither company views the race as anything other than additive.

Jonathan Halkyard, chief financial officer for Las Vegas-based MGM Resorts, told investors during Wednesday’s earnings call that “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.”

Tom Reeg, chief executive officer of Reno-based Caesars Entertainment, said he expects the annual event will continue to drive more visitors to Las Vegas.

During a third-quarter earnings call Tuesday, Reeg said 2023’s race gave the company a “$17-$18 million lift” in quarterly EBITDA (earnings before interest, taxes, depreciation and amortization) over the same period in 2022.

As for the impact of this year’s race, Reeg said he expects returns will be “flat-to-down.” He said that those estimates were “highly dependent” on the gambling numbers, which could fluctuate significantly because of an influx of affluent international gamblers who follow F1.

Bill Hornbuckle, chief executive officer of MGM Resorts, reaffirmed his position from earlier in the year, in which he suggested hotel room revenue from this year’s event would be down about $30 million compared with 2023. Over the summer, Hornbuckle said that 2024 F1 race weekend sales were “soft” and that some hotel rooms were selling for 50 percent less this year compared with November 2023.

“I think we’re still looking at the same number,” he said during Wednesday’s third-quarter earnings call.

Hornbuckle said the anticipation for last year’s race led to room rates that were difficult to replicate in year two, particularly at the “Big Three,” which are Bellagio, Aria and The Cosmopolitan.

He also noted that an outside entity paid for the Fountain Club in front of the Bellagio on Las Vegas Boulevard last year while MGM footed the bill for its construction this year.

“And so, you put the combination of those two things together — unless we get really lucky in the casino, and all things can happen — we think that number holds,” Hornbuckle said.

David Danzis can be contacted at ddanzis@reviewjournal.com or (702) 383-0378. Follow AC2Vegas_Danzis on X.