Electric Daisy Economics

Generally speaking, if you want to bring an event to Las Vegas, the town is happy to oblige, provided you do three things:

1. Fill rooms with people who

2. Open their wallets and

3. Don’t disturb the other paying guests.

Since last year’s event hit each of those benchmarks, this year the Electric Daisy Carnival is being welcomed back with open arms.

When Insomniac Events, the producers of the multi-day festival, moved it to the Las Vegas Motor Speedway last June after 15 years in Los Angeles, many Las Vegans were skeptical. The previous year’s event, held at the Los Angeles Memorial Coliseum, ended with 100 hospitalizations and the death of a teen partier. Many in Las Vegas weren’t sure exactly what the Electric Daisy Carnival would bring to town—many feared ravers who would pack 12 to a room and wouldn’t spend outside of the event.

But a study commissioned by Insomniac estimated the total economic impact of EDC 2011 at more than $136 million. About $71 million of that was direct spending by 230,000 festival-goers. And, when you look at the numbers, the fears of drug-fueled idlers ransacking the city were overblown; the average Electric Daisy Carnival visitor’s economic impact was quite similar to the average Las Vegas visitor’s.

Excluding the price of admission (three-day tickets cost $180), the average out-of-town EDC-goer spent about $932 over the festival’s three days in Las Vegas. About 15 percent of that was spent on transportation—getting to the racetrack isn’t cheap. Participants spent about the Las Vegas average on rooms, meals and shopping. The only real aberration is the low gambling spend—at $35 per day, the average EDC-er is well below the Las Vegas average of $121. But since a good portion of festival-goers are between 18 and 21, that might not be such a bad thing.

To put it all in perspective, the Las Vegas Convention and Visitors Authority estimated total non-gaming direct spending for this year’s NASCAR Sprint Cup race at $177 million, and the Consumer Electronics Show’s as $202 million. The National Finals Rodeo, which brings a boost during an otherwise-slow December, brought in about $60 million in non-gaming spending. These aren’t exactly apples and apples here, but it’s clear that although the Electric Daisy Carnival is far from the biggest event of the year, it’s no slouch. And this year’s attendance is expected to rise significantly.

Despite all the trepidation, last year’s EDC was largely drama-free. “No one died” is hardly a ringing endorsement of a production, but there was a palpable shift in the relationship between EDC and Las Vegas when last year’s event went off with no major incidents.

The apparent success of the Electric Daisy Carnival in Las Vegas even inspired some sniping from its erstwhile home. In a July 29, 2011, editorial, the Los Angeles Times mused: “If any city is equipped to handle an unruly crowd of young people high on drugs, it’s Las Vegas. We couldn’t be happier that Insomniac has taken its act there. This is definitely a situation in which we hope that what goes to Vegas stays in Vegas.”

But Insomniac isn’t just staying in Vegas; it’s doubled down on the city, which has returned the favor. The three-day festival has become the climax of an EDC week. On June 7, the night before the action starts at the Speedway, Insomniac is taking over the Orleans Arena for its Bassrush Massive show. Earlier in the week, the Cosmopolitan is hosting Insomniac-produced EDMbiz, a multi-day meeting for electronic dance music professionals—artists, agents, producers and others involved in the growing business of beat-making. And the company has partnered with the TAO Group, which operates three high-profile Strip venues, Tao, Lavo and Marquee, in presenting special events at all three venues during EDC week.

In April, Marquee Dayclub and Insomniac launched Wet Wonderland, which runs Sundays through the end of pool season. It’s a marriage made in Sin City, according to TAO Group partner Jason Strauss, who says that the brands pooling their efforts to bring EDM to the Vegas masses will benefit both.

The TAO Group was initially happy to see Insomniac come to Las Vegas—Marquee presented the VIP stage at last year’s festival—but, in the wake of last year’s success, it has moved even closer to the company.

“We knew we would continue working with them,” Strauss says, “but the overwhelming positive response was certainly an incentive to expand on our projects together.”

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