If you thought fight nights were big in Las Vegas, then you're in for a surprise when Formula 1 rolls into town in November 2023. Last week, Liberty Media's (FWONA) Formula 1 racing series announced a deal with the City of Las Vegas to run a race down the Las Vegas Strip starting next year, and it's going to bring an influx of money.
For casinos that line The Strip -- like MGM Resorts (MGM 4.04%), Caesars Entertainment (CZR 2.89%), and Wynn Resorts (WYNN 2.01%) -- this will be another reason to be bullish on growth, especially if the race falls on Thanksgiving weekend, as has been reported. This is typically a soft spot on the calendar in Las Vegas and could suddenly become the most lucrative weekend of the year for casino stocks.
Formula 1 isn't just another event
Las Vegas casinos rely on food and entertainment to bring gamblers into the city, and big events like boxing matches and concerts have become a growing driver of traffic in recent years.
A typical Floyd Mayweather fight is estimated to have about a $100 million impact on the Las Vegas economy through higher room rates, gambling activity, and other associated spending by visitors. By comparison, the Circuit of the Americas track near Austin, Texas, which hosted its first Formula 1 race in 2012, estimates it has had a $5 billion economic impact on the Austin metro area since 2010 when the track was announced. The tiny Principality of Monaco estimates that its F1 race brings $110 million to the economy each year.
While the exact financial impact of the Formula 1 race isn't easily identifiable, I think it's safe to say this is going to be an extremely impactful weekend for the Las Vegas Strip. Given its ability to house hundreds of thousands of people within a short walk to the track, it wouldn't be surprising if this becomes the most lucrative weekend of the year.
Las Vegas is piling up wins
2021 was a record year for the Las Vegas Strip with $7.1 billion in gambling revenue, breaking the all-time record. Not only were people eager to get out to gamble, but Las Vegas also partnered with year-round entertainment and events with the NFL and NHL.
Gambling will always be a draw to Las Vegas, and shows like Cirque du Soleil are proven winners, but sporting events outside of fights are relatively new to the region. They could bring in new customers willing to spend big on hotel rooms, food, and even a little gambling.
Adding Formula 1 to the calendar is another reason to be bullish on Las Vegas' casino stocks, and MGM and Caesars will likely be two of the biggest winners given their control of the Las Vegas Strip. Wynn Resorts is the high-roller play, and its front row seat to some of the race's most exciting corners could make it a hot ticket as well.
I'm certainly more bullish on my Las Vegas casino stocks after this announcement, and I like what this means for the region's future.