LAS VEGAS AND FORMULA 1

Formula 1 has had a long relationship with Vegas dating back to races which were held in the car park of the Caesar’s Palace casino in 1981 and 1982. It was a big flop. The track was dull and few people attended.

Bernie Ecclestone did not want to give up and continued to try to get another race in Vegas, which he believed would fit with F1’s image. He used a friend of his called Tommy Baker to try to put together a deal. In 1996five representatives of Las Vegas casinos visited the Monaco GP, including Steve Wynn and Bobby Baldwin. The casinos wanted to use the race to promote the idea that the city was “the Entertainment Capital of the World” although they baulked at paying Bernie Ecclestone’s asking price. There was opposition at the time from other casino owners who did not want access to their facilities being reduced by a race. After these efforts failed there was an attempt to build a semi-permanent facility on a golf course at the south end of The Strip. In the end however the golf course was built but without a race track included.  Wynn was back at an F1 race in 2005 in Montreal at the same time as he was planning to open his own Wynn Las Vegas resort and later a second called Encore.

The biggest was always to convince the casino owners that a race was a good idea and to find someone to pay to be the promoter.

This year Bernie let slip that there was someone in Montreal from Las Vegas, keen to promote a race in the Nevada city. Las Vegas continues to boom and the casinos there continue to try to find new events to bring in more people to play at the casinos and use the hotel rooms. The emphasis in recent years has been very much on promoting family-friendly events and Formula 1 fits the bill perfectly as it has an image that Las Vegas would like to have and would bring in more than hardline gamblers. The big problem is finding someone who is willing to invest in such a project.

In recent years, however, things have changed. Liberty Media took over F1 from Ecclestone and CVC Capital Partners and there was a flurry of new activity around Las Vegas although his led to a tiresome situation when a wannabe F1 promoter who did not have a mandate managed to get a marketing agency representing the city to sign a non-disclosure agreement forbidding the LVCVA to talk with anybody else about organising a race. This all ended up in court with the promoter being sent packing.

At the same time Vegas began looking at a different kind of future because growth had stalled. In 2000 the city attracted 36 million visitors but it took 14 years before that number reached 40 million.  Vegas suffered from the boom in online gambling and the liberalisation of laws relating to casinos in other states. The city began to realise that it needed to look beyond casinos and to expand into other businesses, notably the convention trade, family holidays and big international sports events.  The number of visit numbers peaked in 2016 at 42.9 million but then began to fall back, mainly as a result of a mass shooting that took place in 2017 which resulted in the deaths of 60 people.

And then came the pandemic when the visitor number plummeted to 19 million. Things have been improving since then and the opening of new casinos and the expansion of the Las Vegas Convention Center have added to the numbers. At the same time, F1 has enjoyed a boom in US interest, thanks to the Netflix series Drive to Survive, so the two forces were aligned.

The question of finding a promoter was never going to be easy and in the end F1 and its parent Liberty Media concluded that the best thing would be to promote the race itself. This makes a lot of sense because having a race without a promoter takes out the middle man and that means that all revenues go to F1. However there is also an element of risk as F1 has to deal with potential losses. Liberty Media controls Live Nation Entertainment Inc, which promotes, operates, and manages ticket sales for live entertainment internationally.

The deal is for three years, which gives Liberty and F1 the opportunity to bale out if the project does not work, but the chances are that it will be a big success and that the deal will be extended in the future, as F1 rides a wave of popularity in the US.

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