Gaming industry leaders continue to view the current business climate as mostly positive, albeit with some minor concerns for the near future.
That’s according to the American Gaming Association’s Gaming Industry Outlook, a biannual survey conducted by Oxford Economics to measure industry growth and future expectations.
“After years of very strong consumer gaming spending growth, expectations around customer activity over the next three to six months have cooled considerably,” said AGA Vice President of Research David Forman in a statement. “Still, gaming businesses remain well positioned, with executives touting strong balance sheets and more viewing access to credit as easy than restrictive for the first time in two years.”
The AGA survey reveals that despite slowing revenue expansion, gaming industry leaders continue to hold an overall positive view of gaming industry, with a notable improvement in credit conditions. According to the survey, 88% of executives view the current state of the gaming industry as either good or satisfactory.
However, executives have a more conservative outlook on future business conditions. Respondents split on whether they expect conditions to improve over the next three-to-six months (3%) and many expect a decrease in customer activity (28%).
Since the first quarter of 2024, gaming executives’ sentiment has shifted. More respondents now expect a decline in customer activity over the next three to six months, (28%, up from 4% in Q1).
Despite this, 34% of respondents think there will be improvements in overall balance sheet health.
Executives also reported access to credit as easy (19%) rather than restrictive (3%) for the first time in two years, and fewer cite interest rates as a major limiting factor next spring.
Hotel (56%) and food and beverage facilities (56%) continue to be the main and growing focus of capital investment among operators, followed by live entertainment (28%) and casino floor slots (22%). And gaming equipment suppliers believe their pace of capital investment and game sales will decelerate (13%).
The expectations are impacted by evolving macroeconomic challenges. Uncertainty with the economic environment rates is the top of concern of executives (56%, up from 34% in Q1), followed by state regulatory concerns (31%), and inflationary or interest rate concerns and geopolitical risk (both 34%).
The Current Conditions Index for Q3 2024 was 97.3, consistent with real annualized contraction of 2.7 percent. The Current Conditions Index measures real economic activity in the industry, as measured by gaming revenue, employment and employee wages and salaries.
The Future Conditions Index, an indicator of changes in industry conditions, measured 98.9 in Q3. This shows an environment in which real economic activity in the gaming sector, after accounting for underlying inflation, is expected to moderately decrease over the next six months at a 1.1% annualized rate.
The Q3 2024 survey, conducted between August 21 and September 6, 2024, was of 32 executives at the major international and domestic gaming companies, tribal gaming operators, single unit casino operators, major gaming equipment suppliers, and major igaming and/or sports betting operators.
