While gaming industry leaders see a positive current condition, they're taking a cautious approach with an uncertain economic future ahead.
The American Gaming Association's Gaming Industry Outlook, which uses the Current Conditions Index and a panel of gaming executives to measure gaming revenue, employment, and employee wages and salaries, reported a healthy score of 106.0 during a solid first quarter of 2023.
The report, presented by Fitch Ratings, saw annualized growth of 8.4% over the last three quarters, reflecting “real underlying growth, controlled for the effects of inflation”, the AGA said in the outlook.
“Gaming’s record momentum has continued into 2023 and that is clearly reflected by the attitudes of gaming executives around the country,” AGA president and CEO Bill Miller said. “While projections of slowing growth across the American economy are muting expectations for gaming in the medium term, our industry is well-positioned to weather any potential headwinds.”
Uncertainty ahead
From a panel of 26 gaming industry executives, 62% view the current state of industry business as good while 35% believe it's satisfactory.
On the same panel, 64% believe conditions will stay the same moving forward while only 20% foresee future improvement.
That partially led to the Future Conditions Index falling to 97.1 in the first quarter, indicating that industry economics are expected to decrease over the next six months. The Oxford Economics forecast predicts a mild recession coming to the U.S. economy in the back half of 2023.
Inflation, interest rates, and economic uncertainty top the list of the panel’s concerns for continued growth.
The panel is made up of executives from international and domestic gaming companies, tribal gaming operators, single-unit casino operators, major gaming equipment suppliers, and major iGaming and/or sports betting operators.
AGA reports a thriving industry
The AGA is a national trade group that represents the U.S. casino industry of legal, regulated gaming. The organization’s memberships lead the $261 billion industry and support nearly 2 million gaming jobs in the U.S.
The AGA’s Commercial Gaming Revenue Tracker reflected the current strength in the industry with a reported revenue of $5.12 billion in February from traditional casino games, sports betting, and iGaming. That marked the highest-grossing month ever and a 14.5% year-over-year increase.
Even though legal sports betting saw a 40% revenue decrease from January to February because of football season winding down, the AGA reported a 71.5% increase to $678.7 million in revenue from the same period in 2022.
Adding retail and online sports betting sites in Ohio, retail in Massachusetts, and mobile in Maryland played major roles in the rise.
