The American Gaming Association (AGA) study reveals that the US gambling sector expanded at a slower pace in the initial period, yet it’s deemed more stable.
The AGA’s Gaming Industry Outlook Report indicates that the Current Conditions Index for the first quarter of 2024 stands at 102.8. This signifies a 2.8% increase in industry growth over the past year. The Current Conditions Index assesses the performance of the US casino gaming industry, encompassing revenue generation and employee compensation.
The AGA’s Future Conditions Index also displays 102.2 in the first quarter, suggesting an anticipated growth of 2.2% in the upcoming six months. The Future Conditions Index forecasts the future trajectory of the US casino gaming industry, taking into account economic factors, consumer spending sentiment, and the perspectives of the AGA Gaming Executive Panel. The panel comprises prominent figures within the gaming sector.
The AGA polled 32 executives from US gaming enterprises regarding their outlook on the gaming industry. They expressed that the industry is currently performing adequately, but anticipate even brighter prospects in the future.
The Prospective Circumstances Index also suggests a more robust economy than initially anticipated, though it is anticipated to decelerate for the remainder of 2024.
Expansion has slowed in comparison to prior years.
The AGA’s Present Circumstances Index reveals that actual economic activity in 2023 has been less brisk than in 2021 and 2022.
Nevertheless, the index remains at a positive 102.8, indicating that “industry expansion remains robust” despite elevated inflation somewhat diminishing its findings. This follows a reading of 108.8 in the final quarter of 2023, consistent with an annualized growth rate of 8.8%.
Gaming company chief executives’ expectations for growth are roughly the same as they were six months prior. Positive responses outweighed negative responses by 6.3%, down from 6.4% in the third quarter of 2023.
According to 32% of executives, conditions will improve in the next three to six months. Meanwhile, 58% expect gaming activity to remain at the same level. The finding that nine out of ten individuals expect the industry to improve or remain unchanged is also higher than the eight out of ten reported in the autumn. Overall, 44% describe current conditions as favorable, while 50% say they are acceptable.
Moreover, 42% of executives are more optimistic about the overall health of their balance sheets improving. However, 13% expect revenue growth to stagnate, while 22% predict a slowdown in new hiring.
AGA anticipates growth to slow further in a “restrictive” financial environment.
Considering the anticipated economic deceleration in the United States for 2024, the American Gaming Association (AGA) also anticipates that elevated interest rates will continue to hinder growth within the gaming sector.
Nevertheless, the AGA expects a robust job market to enhance discretionary income. Consequently, the AGA is more positive about the future than it was six months prior.
Looking forward, 19% of executives characterize credit accessibility as restricted, a decrease from 26% in the preceding CEO survey. Over a quarter (28%) of participants also indicated that concerns regarding interest rates limiting operations are a constraint, while 34% pointed to geopolitical hazards. Moreover, 34% of participants cited economic uncertainty as a limiting factor.
Lastly, the AGA stated that its Future Index reading of 102.2 reflects expansion in gaming industry economic activity, taking into account potential inflation.
Sign up for the iGaming newsletter.