One of the most hyped races in Formula 1 history, how does the Formula 1 Las Vegas Grand Prix benefit Las Vegas?

That's up for debate this week on Nevada Week.

♪♪♪ Support for Nevada Week is provided by Senator William H. Hernstadt.

-Welcome to Nevada Week.

I'm Amber Renee Dixon.

For the first time in more than 40 years, Formula 1 is back in Las Vegas.

Unlike the races here in the early 80s, though, which took place primarily in the parking lot of Caesars Palace during the day, this race goes down the iconic Las Vegas Strip at night.

It's 50 laps on a 3.8 mile course.

Months of construction and roadwork have made it possible.

And following its development ever since the race was announced in March of 2022 have been Rick Velotta, Assistant Business Editor at the Las Vegas Review-Journal; Alan Snel, Publisher of LVSportsBiz.com; Mikhail Miranda, Formula 1 Betting Expert at VSiN; and John Katsilometes, Columnist at the Las Vegas Review-Journal.

Gentlemen, welcome.

We are going to talk about the race itself because there are unique aspects that Mikhail is going to tell us about.

But I want to start with a broad question of whether the Las Vegas Grand Prix is good for Southern Nevada.

Can I start with you, Rick?

(Rick Velotta) I think the idea was that this is going to be something that's going to be fantastic for Southern Nevada, because they're bringing in an audience of international guests that really have been low in the past few years because of COVID-19.

But as things have progressed and some details of the race have come out, maybe there's not quite as much enthusiasm for it as there was in the past because of the effect that it's had on local residents and local business people.

-Those impacts being, Alan?

(Alan Snel) Well, I think bringing up the word "debate" is kind of a polite way of what we've seen, because it's-- we've seen locals act, I think, quite angry about the impact and disruptions at all the improvements and roadwork.

And basically you're building a linear stadium along, you know, nearly four miles of public right of away.

So the public officials, Clark County Commissioners who brought this, approved this project, will have to answer a very simple question, and that is: Are the economic benefits that are still up to debate-- and we'll see in the next few months in terms of sales tax revenue and hotel room occupancy rates and such.

We'll see if all those numbers are worth the kind of disruption and really difficult commutes and kind of misery by some of the workers who have to work along this really high-profile corridor.

-Johnny Kats, good for Las Vegas?

(John Katsilometes) Well, I will tell you that where I live in the entertainment industry especially, it has not been an economic boom by any stretch of the imagination this week and in the run up to the show.

Ross Mollison, who's got three productions in Las Vegas, including Absinthe, one of the biggest sellers in the city, says he's had his worst week ever this week.

And that is not uncommon among people who put on shows.

So somehow this economic impact, those losses are going to have to be offset.

This is happening in entertainment.

This is happening in restaurants.

We've had coverage of that too.

Our friends, for example, Battista's, a legendary restaurant, had been telling us, everybody, that they've had 100 cancellations a night because of the F1.

So when the money rolls in, I'd like to see some way to explain to the people who have been putting on shows and running restaurants how they're going to benefit over time.

We need to have that conversation after F1.

-Yeah.

I hope you don't mind.

I'll just call you Kats.

-All right.

You just did it.

-Johnny Kats.

-But I think you've raised a good point.

I think you listed some of the shows that went black during the week.

-Many.

-And what's interesting about these big billion dollar numbers that are being thrown about, that's been thrown around for the last several months, really, is that how will the losses be calculated in the bottom line net income?

I'm still waiting to see that number come out in the wash. Also keep in mind, what about all the lost hours, people in traffic?

People couldn't get to work.

They're still struggling get to work this week.

How will those losses be calculated in the net income from this big event?

-And you're right.

There have been varying reports of the economic impact: 1.7 billion from some organizers, 1.3 billion from the LVCVA.

Mikhail, tell me what you think about is this good for Southern Nevada?

(Mikhail Miranda) I think it is.

There's been a lot of talk about wanting to come back to Vegas ever since Austin.

And [inaudible] you still have to survive.

It blew up during COVID, and everyone got into this.

And it was a great time to enjoy a great show.

But as we were going, and they said, It's going to come to Vegas, I'm like, yes, let's, get back here.

Let's go two and have a couple races here.

But the fact that it come so soon, I think, causes a bit of an issue for me.

I think they needed to wait a little bit.

Because now that we're on a second year of the new technical directives-- -Explain how that works.

New technical regulations, right?

-Yeah.

So that's basically the FIA and Formula 1, they get together.

They try to get closer racing.

So they go and say, All right, the car should be designed this way.

So the new design is to reduce any disturbing wake, which is the air coming off the car in front of you.

They tried to reduce that so the cars behind can follow you much closer.

So it did bring everything closer, but now teams in the second year have regressed at the start of the season.

And you saw Max Verstappen and Red Bull absolutely dominate the rest of the season.

And so now that we're closer to-- the panels were raised and getting to the end of the season, it's like what's the point of coming to Vegas and any of the races since Max wrapped up the championship?

-Right.

-There was no closer racing at all this season.

I felt like when you get to the engine regulations in '26, that would restart everything for all the teams.

So it's going to be much closer.

And if Vegas take it back then to 2026, it would have been more fun to watch it as a fan, as the bettor, and just everyone in Vegas, because it would have had time to prepare for this.

But I know we have a lot more sports coming to Vegas, so that might have been a clash there.

But I think if they had waited, they could have capitalized a bit more and give businesses some time to prepare for it.

-That as well.

And better plans around construction.

-It feels exhibitionist, exhibition like, this event to me, right?

I mean, I don't follow the circuit, you know, only recently, but it feels like this is what an F1 race would look like if it were, you know, performed in Las Vegas.

-They're trying to be a lot more performative, rather than being races and drivers and being Formula 1.

-That's a point brought up by Max-- -Yeah.

- --about the show.

Quite frankly, it seems like every sports event now has to have this bigger than life kind of veneer to it.

You start with the Vegas Golden Knights, the Raiders have their showtime shtick, and obviously F1 is putting on a show that's kind of wrapped around a race.

-But then the other thing, part of it, too, is that a lot of local people really have not got much of an idea of what F1 looks like.

And this will be something new to expose the local audience to.

However, it's very difficult for some of the local audience to actually see this in person because of the prohibitive prices.

-What's interesting about that, Rick, is that the Las Vegas Grand Prix had a representative actually issue a statement saying, If you-- if you don't have a ticket and you're not directly involved, it's a good idea to stay away from the Strip corridor.

-I read that too.

-I mean it's almost acknowledging that-- to your point, Rick, I mean, those folks are not going to see it.

They're not going to eyewitness it.

Last night, for example, was the big superduper drone show and the fireworks.

-The grand opening ceremony.

-Right.

And it was rainy and drizzly, so I'm sure a lot of locals stayed away.

But, you know, to your point, not too many locals have really experienced this.

-When they first started talking about this, a lot of people asked me about what was going to happen.

And I said, well, it's still early.

But they were all excited about, Oh, this is gonna be on a public street, so we'll be able to walk on the sidewalks and watch.

But that's not happening.

-Yeah, right.

-They had some PR stumbles, I thought.

That $200 ticket that they were hyping for the locals actually was not a ticket to the Saturday night race.

I think was for Thursday.

-For the Thursday qualifying.

-Exactly.

I know that ticked off a lot of locals because they felt they were misled.

-Mikhail?

-There was a lot going on from the PR's point, because every time they mentioned Vegas, all they said was, "On the streets of Vegas, down the Strip."

I go, a race is not just one strip.

There's corners and everything.

And the fact that they chose to do a street race also was concerning to me.

The original plan I heard, rumors from people in F1, was that they wanted to build an actual F1 track out here.

That was the plan.

But to do that, you have to go through the FIA, and the track has to be approved by them to circumnavigate that.

You get a street race.

So they had the talks last year, and that's what the race is on this year.

If it was a track race, you had talks last year, you wait till '26 to get the race on.

So there was a lot of things going on with tracks and having to get their contracts up and renewed.

We lost France this year.

I think that's a big Grand Prix that just got taken off.

And Vegas is on.

So I don't like that fact, like, they have to go through the certain steps and get a good race on because Vegas has been hyped up so much.

And if it does not live up to the standard, what happens as a financial incentive?

No one wants to come back here.

Because if it's that expensive, tickets will drop down.

But again, doesn't matter the tickets drop down; it's not fun to be here.

-Which they have dropped down, as have hotel rates?

-Hotel rates also.

-Mikhail, you brought up a good point about how the Strip has been kind of the star of the show, yet the public has no access to it.

But something that locals will recognize is that the parallel road, Koval Lane, actually is an important kind of secondary spine used by a lot of hotel workers, a lot of entertainment people.

It's a key transportation corridor.

Koval was actually going-- it's going to be closed for a whole week, even after the race.

I believe it's November 25 when they're going to even reopen Koval, which obviously has been taken over as part of the literal venue for this event.

But again, that's just another little thing that is irritating locals where even after the race, it's going to be weeks.

I think Steve Hill at the LVCVA mentioned it was going to be another six to eight weeks after the race until things get back to normal on the Strip.

That will be about three, four months of time that the rhythms of everyday life has been disrupted.

-And I'm wondering what the National Finals Rodeo people think about that, because they're trying to move in and get some publicity before their event, which is in early December.

-That's my dream matchups by the way is NFR and F1 brought together.

-What a unique combo of a crowd, huh?

-An F1 sponsored cowboy and Indian-- but I will tell you, on this teardown thing, you know, I'm looking at that as much as anything too.

I was joking with the folks at MGM Resorts International about the Bellagio Fountain Club.

They want to take that down by the holidays.

They want to have that thing completely out.

And I was saying you might want to open that up to some volunteers from Las Vegas to help take that down, because I think a lot of people would be there to roll it out and help expedite the process.

But they're going to store it at the Cosmopolitan at the old employee parking garage there and put that away.

Then they're saying they can just snap it together and put it back next year.

So they're preparing already for next year.

But the-- -Is it going to easier next year because of the infrastructure?

-You would think.

-The thing that comes down to for races is if they have to repave the tracks, that's-- -How often?

-I hope they don't do that often.

Because the whole point of the street race is to get the realism from the street itself.

If you're paving it, then you just have another track down.

Make it your own track.

-I heard five years; we'd have to do extensive work again after the five-year mark.

-But keep in mind, you know, F1 is asking Clark County for $40 million toward the repaving job.

That's also been a spur under the, under the craw for the locals as well.

-When will that be decided, whether Clark County is paying that?

-Jim Gibson had kind of a soupy explanation for this.

It was kind of at a press conference kind of thing with Metro Police.

And he basically said the bottom line is they wanted to negotiate this thing after the race, which I think is a good thing.

Like don't even bring it up during race week, and just do the negotiations later.

I will say people will be very upset if Clark County is on the hook for $40 million after being put through the wringer for the last two to three months.

-Yeah.

-After being promised a windfall.

-Right.

Well, help me understand this, Rick, because the CEO of the LVCVA reportedly said the race is going to bring in about $100 million in tax revenue.

But you reported in April that the LVCVA is projecting flat tax revenue for the 2023-2024 fiscal year.

-Well, it's because of some of the other-- some of the other losses.

Or not not losses, but declines in other revenues in the past.

This is kind of a make-up situation.

So even though this particular race should benefit to a great extent-- and I'm thinking not just because room taxes are going to be through the roof with some of the average daily room rates that are in place, but also we're anticipating that the gaming numbers are going to be up.

We won't know those answers until like the end of December.

So once we see that, then maybe we'll have a better assessment of just exactly where the tax revenue is gonna go.

-Okay.

So let's talk about the race itself a little bit.

Mikhail, what excites you about it, because, as you mentioned, the championship has already been crowned.

So what is there to watch?

-So a lot of people don't know that just because the championship is wrapped up doesn't mean there aren't fights going on.

Where you finish in the Constructors' Championship means a great deal for the constructors.

It's tens of millions of dollars for next year's project.

So Mercedes, McLaren, Ferrari, Aston Martin are still fighting for positions from 2 to 5.

That is a great championship fight right there because McLaren and Mercedes said that beginning of the year, their car wasn't great.

Now they've turned that around.

McLaren [inaudible] Mercedes, and you've seen the fights that come back.

Where they finished in the championship could be crucial to how they design next year's car, which could mean closer fighting against Red Bull next year or further fighting from Red Bull.

Or maybe Red Bull doesn't fight at all, and it's gonna be Ferrari and Mercedes.

All this makes a great deal for fighting and watching the race.

So you're not really watching who's gonna win the race.

You're watching for who finishes where now.

You're just looking at the rest of the grid.

Everyone's forgotten about Max.

Like Max?

Ah, no, please don't.

Now it's like, But who's the next name that you know?

Lewis Hamilton is a great name.

Daniel Ricciardo.

These are big names in Formula 1.

We're gonna be watching them a lot closely, than Red Bull and Max Verstappen.

-But I'm curious if Nevada people or Nevada sports fans even know these names or care about these names.

This is largely a European crowd that's going to be really intensely interested in this.

-I think the thing that they didn't really get around is they wanted an American team.

They do have one.

Haas is an American team.

Gene Haas from NASCAR has a Formula 1 team, but they have no American drivers in this American team.

And the American driver is Logan Sargeant at Williams.

They've done to get him up there and get some fame on his name.

But his teammate Alex Albon has taken the light from him because of how good he's performed this year.

And Logan, in comparison, has not done as well.

So I think when you put an American team and American driver, it's this all-American thing.

It makes you want to watch as an American fan.

Like, Okay, I want to see what America can do in a European sport now.

That makes people here, I believe, want to watch the race.

But when you don't have that all-American, it's like, now I'll focus on football or focus on something else.

-And I also think about the start time of this race.

It is catered for the European audience, correct?

-Yep.

-So how well do you think this Grand Prix is doing in reaching the U.S. fan base as it has claimed it's been wanting to do?

-On the East Coast hubs, you're talking about a race that's going to start 1 a.m. in the morning on Sunday.

To me it's a big gamble by Formula 1.

They have planted the flag in the ground with this incredible building.

I mean, it's a building that they say will be used for corporate parties and entertainment purposes during the year.

And to me, it will be an interesting showdown between our two really high-power buildings.

You have Raider Stadium, which has a lot of events.

They have a lot of catered events, a lot of corporate things going on.

And this building, I mean, again, another top-shelf, upscale venue.

-You're talking about the pit building.

-The pit building.

And it was expensive.

And they've invested, what, half a billion dollars in this?

So this is-- and they're looking, I think, to cultivate an American fan base and get some, you know, get some fans coming to-- you know, they also have Austin and Miami.

So it's interesting that, I believe, is there another continent with three races in F1?

-Now they travel everywhere.

-Yeah.

So they're counting on being here for at least 10 years.

-Right.

-They want to.

Their contract runs out 5 years, but hopefully extend to 10.

I'm not gonna lie.

I hope they don't do that.

I hope they take a break for about a year or so.

That way they can focus.

Okay, what do we want F1 in Vegas to look like?

Right now all they wanted was F1 to come to Vegas.

Now that it's here, you're going to take a look at the books.

There's going to be a lot of scrutiny from people here in Vegas, because they have not been happy as we've all said.

There's nothing happy for residents of Vegas.

Having this race at night, that's when a lot of parties and people come in.

So now you've taken access to all those as well, like the nightclubs and everything.

That's gone away as well.

-I hear that a lot.

I heard, We want this during the day.

If they're going to do it now and upset-- -Absolutely.

-Yeah, exactly.

-Why though?

-Because our city runs its hospitality and entertainment at night.

You could lead into that with the race and then spill that audience into the clubs and into the shows.

Right now, they're sitting on those schedules, and that's what's causing the problem.

The shows and-- well, I'll just say the shows and even the headliners are having to move either off or during matinees.

And that's-- when you're talking about trying to hit a 50% capacity--and that's what they're saying, We're going for 50% because of this race--that's no place to be.

You can't really make money that way.

So that's another.

I'm just wondering about the nuanced argument about the series, about F1.

That's not the conversation we're having here in Las Vegas about who's going to finish where.

Are we looking at who's gonna finish third?

The conversation is going to be, Is this thing worth it in the first place?

Let's get that established.

I would love to see it.

It's almost like a political campaign, like a primary season.

Nevada to move up in the process, you know, and be more relevant early rather than at the end.

-Let's remember why they stuck it in that, in the week that it is.

That is because it's kind of a slow week.

It was the week before Thanksgiving.

If they could mesh the schedule with F1, then this would be good for everybody.

But the fact is they want to keep this going on a regular basis in that week before because there's been really nothing else on the calendar that's been relevant.

-When you say "they," I think you're talking about the hotel hospitality industry, because I don't think the locals are into it.

But I mean, the hotels, like you said, it's coming at a time that's traditionally slow.

And the argumentation has been very reminiscent of National Finals Rodeo, you know, in the second week of December.

Same concept.

-Right, that it's bringing tourism at a time when it's traditionally historically low.

Whatever happened with the licensing fees that organizers wanted the restaurants and clubs with a view of the race to pay?

-Another horrible public relations stumble.

A lot of people were ticked off, and that went away, I think, after the bad PR.

Again, just not a good way of endearing yourself in your new host community.

-What were you going to say, Johnny Kats?

-I'm with you.

It's a PR blunder.

I haven't spoken to anybody who actually was required to pay it.

I haven't myself.

I don't know if they're out there, but that was the word out there.

Once it got out, I think it did roll back.

-Yeah.

The last I read from the New York Post is I think they lowered the rates.

But the organizers were threatening to put up something to block your view if you didn't pay.

-Or shine the lights into the eyes of people who are sitting trackside.

[laughter] -When I first heard that, I thought, wait a minute.

What are they doing?

-Wow!

Well, I mean, that's similar to putting up those view blockers on the pedestrian bridges.

-You could sell some sponsorships to eye doctors for that one.

-I did try to go and look at the positive of these.

I've tried to look at it from F1's perspective.

Now, the numbers that they projected were, they were going to sell out everything.

And at the time, it made sense.

Like, Hey, pay us this fee, or we will take these spots so that we can make it available to more people but at lower prices.

But I think they underestimated what Thanksgiving means to America.

And because of that slow week-- because everyone wants this week to be a little about [inaudible] because next we're going, It's football.

I'm going to be with your family, your brothers and sisters that I know, your mothers-in-law, and everything else that comes along with that.

You're going to be in that high-stress environment, and you just want to enjoy football.

You don't want to enjoy anything before that.

This is adding the stress before you even get there.

And it's just like, How do I get to work?

It's not, What will to happen at work?

It's, How do I get there?

And I don't think F1 took that into consideration.

Like maybe, It's a slow week.

Let's put this in here.

There's also the people's mentality of what they want to do.

People don't want to come to Vegas during Thanksgiving; they want to be with their families.

Coming out here to watch the race and fly back doesn't make much sense, especially when the prices are this high.

-Astronomical.

And I think organizers have said, You know, next year we'll probably make more general admission tickets available.

So much we can talk about.

We only have a few minutes left, though.

I'm interested in what you all think about the investment that F1 continues to claim it's making in Las Vegas.

To their credit, they're going to be giving $25 million to the Clark County School District to develop a STEM program surrounding this sport, the science and technology involved in it.

They donated a million meals to Three Square food bank.

Any thoughts on when they say, We are invested in this community, how much do you think they really are?

-I think they really are.

You know, this is again an area of public relations that they need to boost a little bit more.

Because you're right.

A lot of people don't even know about this.

But, yeah, anytime an organization, NFL, for example, comes in and puts a lot of effort and money into programs that are important to people locally, it's a good thing, right?

It's going to be something that's going to benefit everybody.

-The Raiders and Golden Knights have done a very good job, especially the Raiders.

When they laid the groundwork when moving here, they made sure to do their community outreach and tell us what they were doing and where they were going.

You know, classically, Mark Davis was on the Board of the Cleveland Clinic before he even visited the facility.

I'd like to see more of a listing and an accounting of that from F1.

I'd like to see them support the Cleveland Clinic, the Smith Center, our arts community, Nevada Ballet Theatre, the Philharmonic, things like that.

Las Vegas Academy for that matter.

There's a whole list, a whole laundry list of areas that they could spend a lot of that money for charity.

I mean, call me.

I'll tell you where you can go with it.

-I will say you know, since you brought up the Golden Knights versus the Raiders and also F1, what we've seen is what happens when Las Vegas assumes ownership of-- -We've got about 15 seconds left.

-When they assume ownership of the product, it works out so much better.

When F1 comes in, when the Raiders come in, it's such a hard lift.

It's such a "moving up a hill" to try to get people on board.

-Gentlemen, thank you for all of your perspectives.

And thank you for watching.

For any of the resources discussed, go to vegaspbs.org/nevadaweek.

And I'll see you next week on Nevada Week.

♪♪♪