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  • Manolo Kidel

Viva Las Vegas or Suspicious Minds? The economic and environmental impact of Las Vegas Grand Prix

It is without a doubt that Formula One is the pinnacle of motorsport, with its innovative technology, breakneck speeds and critical breakthroughs in engineering, which brings great excitement to its fans all over the world. Every race, hundreds of thousands of fans hurry to the tracks to witness their idols drive the world’s fastest cars as they compete for the top step of the podium. With a recent boom in popularity, Formula One drew in an average viewership of 70 million per race in the 2022 season and was considered the fastest growing major sports league on the planet in terms of social media views in 2022*. The infamous ending to the 2021 season, which entailed a fierce battle between Lewis Hamilton and Max Verstappen, was unquestionably a contributing factor to the sport’s rising appeal, but Zac Brown Chief Executive of McClaren Racing voiced that the Netflix Series “Drive to Survive” was likely to be the single most important impact for Formula One in North America.


Recently, Formula One announced that for the 2023 season they would be racing in the prestigious city of Las Vegas, entertaining many of the American fans’ wishes. This event will mark the first Las Vegas Grand Prix since 1982 and, according to senior officials creating this event, is being heralded as the biggest event in the world. Not only will this Grand Prix be a great boost for the sport itself but also for the surrounding area, bringing in large amounts of foreign direct investment to help with improvements to the existing infrastructure and development of future frameworks, ensuring that the city of Las Vegas continues to prosper and grow. In preparation for the race weekend, the Las Vegas strip is being resurfaced to create a street circuit that winds its way through the city past iconic landmarks such as Caesar’s Palace, the Bellagio and the Venetian. This helps to exhibit Formula One’s commitment to enhancing the host city’s appeal, whilst also attracting many tourists to the area, drawing in capital, new fans and sponsors. Furthermore, the development of the circuit itself offers employment both through direct jobs relating to the race, and indirect jobs in hospitality, restaurants, casinos and local businesses. The economic benefit of this event is emphasised by the CEO of Formula One, Stefano Domenicali, stating that although the overall cost of the project has risen to $400 million, the Las Vegas GP will generate approximately $1.2 billion, more than twice the revenue predicted to be generated by the 2024 Super Bowl, in revenue in its first year*. This staggering statistic helps to demonstrate the massive influence that Formula One has on the world, as it is able to attract people from all over the globe and make large profits off only one weekend race. According to the official F1 Las Vegas GP website, more than 7500 job opportunities will be created in southern Nevada with salaries and wages touching $361 million as a result.* This will be particularly welcomed given that Nevada, following the pandemic, has the highest rate of unemployment in the nation at 5.4%, according to the New York Times. The additional revenue generated will help bestow investments in long term programmes which can help to benefit the local community, for example improvements to transport, recreational facilities and methods to become a more sustainable and an eco-friendlier city. It is claimed that $1 million will go to local non-profit organisations, $5 million projected sales tax will be distributed to local schools and 1 million free meals will be delivered to the local Las Vegas community, helping to further exhibit F1’s drive to benefit the local community and improve the area surrounding the racetrack for a better future. With attendance expected to be an extraordinary 100,000 people*, aside from the economic benefits, there are potential social advantages. The sport will provide high quality recreation and entertainment for its fans but also that infrastructure will remain for the locals on a longer- term basis. Stefano Domenicali further demonstrates his desire to increase the sport's popularity and growth, stating that the Las Vegas Grand Prix is going to be a ‘game changer for Formula 1 and will set the benchmark for all global sports and entertainment and events in the future.’* As Formula Ones extends its reach across the globe, entertaining more races in illustrious cities, economic growth, increased employment and enhanced infrastructure are some of the far reaching benefits beyond the immediate entertainment value.


However, the up-and-coming Las Vegas Grand Prix certainly has its critics. There will be notable environmental impacts, from the building of new hospitality venues and paddock in Las Vegas to light pollution incurred from night-time races. But a key impact under scrutiny will be the air miles and transportation required to get the teams around the world. With the previous Grand Prix in Brazil, 6070 air miles away, it is evident that the F1 teams and Formula 1 as a sport will produce a considerable amount of CO2 and greenhouse gases, transporting both parts and personnel to the circuit, never mind the fans themselves. The large release of greenhouse gases is extremely harmful to the planet, responsible for increasing the rate of climate change and enhancing the rate of global warming. The sport of Formula One produces 256,000 tonnes of CO2 every year, which is simply too much in the world’s battle against climate change and global warming. Transporting equipment totals 45% of F1’s total carbon dioxide production and transporting the personnel produces a staggering 27.7% of total CO2 production. As Formula One increases its global reach and incorporates more circuits, its potential for further rises in CO2 production is unacceptable. However, ironically, Formula One, previously seen as a gas-guzzling, carbon-producing nightmare of a sport is taking radical action to reduce their carbon footprint and becoming a more sustainable sport. For the Las Vegas Grand Prix, the sport has partnered up with the global technology company Switch, which allows them to ensure that the entire race weekend is carbon neutral by powering the whole paddock with 100% renewable energy. This is a significant breakthrough for Formula One as 7.3% of the entire 256,000 tonnes of CO2 produced every year by F1 comes from event operations*, such as broadcasting, paddock club and circuit energy use, so eliminating all emissions produced by the operations during the Las Vegas GP is a massive step forwards as they endeavour to become fully carbon neutral at all race circuits by 2030. Therefore, the world of Formula One now need to focus on the more heavily damaging areas of logistics and business travel. By focussing more on these areas that produce a higher percentage of the overall carbon output, the sport could reduce their environmental impact to a greater extent, allowing them to reach their ambitious environmental targets in the future. It must be noted that advances in engineering and technology mean that the power unit of the cars now only generate 0.8% of Formula Ones total production of 256,000 tonnes of CO2. In addition, much of the fuel-efficient technology developed for Formula One gets passed down into day -to-day car production making all of our vehicles greener. With the Las Vegas Grand Prix being held in a desert destination with significant water shortage, it is pleasing to note on the official Formula One website that the Las Vegas Grand Prix will be launching an innovative water conservation programme, implementing technologies to reduce, and eventually offset, outdoor water consumption at large-scale sporting events.


While Formula 1 offers some of the most thrilling entertainment for sports fans across the globe and provides considerable economic benefits to host cites, currently the sport still has significant environmental impacts, notably the amount of carbon dioxide and greenhouse gas emissions which contribute to global warming and climate change. Nevertheless, Formula 1 is proactively addressing these environmental challenges created by the sport, setting ambitious targets for the future as it strives to become a more sustainable sport.


Las Vegas Grand Prix will be 16-18th November 2023.


References:

*Autoracing1.com

*F1 Las Vegas GP.com

*Nevadasportsnet.com.

*Official F1 website.

*Mark-Gallagher.com

*New York Times

* https://corp.formula1.com/wp-content/uploads/2019/11/Environmental-sustainability-Corp-website-vFINAL.pdf


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6 Comments


Guest
Nov 26, 2023

Love this view point! f1 definitely needs to consider their environmental impact across the world! great article.

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Guest
Nov 23, 2023

Would be interesting to see the figures now the race has been run and how that compares environmentally to the rest of Las Vegas, with the lights, fountains and hotels going 24/7 and what the lasting impact of these initiatives will be in reality. Thought provoking article indeed!

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Guest
Nov 10, 2023

Great to see your obvious passion for F1 fuelling an emerging passion for economic analysis!

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Guest
Nov 09, 2023

Great article ! Interesting read ! would be interesting to compare these figures with the supposedly greener alternative formula e !

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Guest
Nov 08, 2023

Fantastic article, Manolo! Well done!!!❤️

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