Tech offerings bolster gaming’s global economic impact, AGEM study finds

April 4, 2023 8:59 AM
Photo: CDC Gaming Reports/AGEM
  • Mark Gruetze, CDC Gaming Reports
April 4, 2023 8:59 AM
  • Mark Gruetze, CDC Gaming Reports

Gaming equipment manufacturers proved resilient over the past three years and enhanced their status as technology providers vital to economies worldwide, a study released today shows.

AGEM Executive Director Daron Dorsey

Direct employment among members of the Association of Gaming Equipment Manufacturers hit 67,565 in 2021, with those wages and salaries totaling a new high of $8 billion, says the first post-pandemic Impact Analysis: Global Gaming Supplier Industry. Even with COVID’s lingering effects, such as travel limitations and supply-chain issues, the study says AGEM members had a direct economic impact of $17 billion around the world; the total climbs to $44.4 billion with the ripple effects of that spending.

“Equipment manufacturers figured out how to manage and address the new normal,” AGEM Executive Director Daron Dorsey told CDC Gaming Reports, noting that gaming operators made similar adjustments. “Everybody found a way to keep operating their businesses in a very competitive way despite really difficult challenges.”

AGEM usually does its Impact Analysis, which “provides the most comprehensive reporting on the industry,” every two years, but COVID threw off that schedule, so this is the first update since 2019. The studies say figures in the reports are not necessarily comparable to other years’ because of technological advancements, expansion of offerings, and changes in company ownership.

The association has more than 150 member companies based in 23 countries. In addition to the world’s largest slot machine manufacturers, members include companies active in lotteries, systems, table games, online gaming, sports betting, mobile apps, and other gaming segments.

The new study says key suppliers have not yet reported financial results for 2022, but “the expectation is that the recovery trend (of 2021) continued in 2022.” Among AGEM voting member companies surveyed for the report:

  • 2 percent saw increased revenue in 2021
  • 6 percent reported that employment increased from 2020
  • 43 percent expect to increase workforce over the next 12 months, while 50 percent expect to maintain staffing levels
  • 61 percent said salaries and wages paid increased in 2021
  • 82 percent reported that more than three-fourths of their employees have employer-sponsored health care

Gaming supply companies headquartered or doing business in Nevada generated $8.3 billion in direct global economic output, the study found. Those companies also accounted for $11.9 billion in total value added and $5.9 billion in wages and salaries. Worldwide, the average wage per direct employee was about $118,320 in U.S. dollars in 2021, the study says.

Dorsey said the industry hasn’t completely recovered from the pandemic, and Macau is “not yet back on its feet.” Even with that, he added, manufacturers have made significant progress in solving supply-chain and logistical issues.

Global inflation is a current challenge, he said, but “the supplier side has been consistent in keeping a lot of people employed.”

Beyond all the numbers, Dorsey sees AGEM companies accelerating technological growth and innovation in the gaming industry, where change had been slow partially because of strict regulations that can vary by jurisdiction. He said gaming suppliers have evolved into technology providers, offering innovations that improve gaming customers’ experience with the same approaches for advancing all consumer products, from smartphones to vehicles.

“This is a great sector and a great business for anyone who wants to be part of technology and innovation,” he said. “It’s a tremendous opportunity for engineers, mathematicians, game designers, network engineers, and artists. It’s going to be important to the fabric of so many places for the next decade.”

AGEM and its members have encouraged students in those fields through contributions to colleges and universities, tribal scholarship funds, and similar endeavors worldwide. The association also championed a 2019 change in Nevada law so college students under 21 could obtain internships with gaming suppliers. Previously, gaming license requirements prevented that.

Dorsey is confident that even better days are ahead for gaming suppliers.

“It’s a critical and core industry in so many parts of the world,” he said. “Regulated gaming is a part of the public policy framework for almost every place anyone lives around the globe. It’s going to be part of the overall economic cycle for many years to come.”

Mark Gruetze is a veteran journalist from suburban Pittsburgh who covers casino gaming issues and personalities.