TransUnion survey indicates gaming industry needs to be aware of economy, inflation

January 25, 2024 8:40 AM
Photo: Shutterstock
  • Rege Behe, CDC Gaming Reports
January 25, 2024 8:40 AM
  • Rege Behe, CDC Gaming Reports

The gaming industry is as healthy as it’s ever been, having experienced 11 consecutive quarters of growth through the third quarter of 2023, according to data compiled by the American Gaming Association. But a new survey released today by TransUnion, an IT services and consulting company, warns of conditions that might cause the industry’s financial gains to slow a bit.

Story continues below

“We’re seeing, overall, that consumers are definitely tying their financial behaviors to the impacts of inflation and the wider economy,” said TransUnion Senior Director – Gaming Declan Raines about the company’s “H1 2024 U.S. Gaming Report.” “We’re seeing that people are starting to cut back on their discretionary spending and increase their insulation for many of the impacts from the current economic development. I think you’re look at consumers who are either preparing for a recession or looking for ways to shore up their finances in anticipation of one, and that impacts the industry, of course.”

TransUnion’s survey, conducted Sept. 27 through Oct. 9, 2023, queried 3,000 adults in the U.S. via a partnership with third-party research provider Dynata.

Raines has worked with gaming-industry data for a decade and he’s familiar with the idea that gambling is recession proof. But he says it’s instructive to understand where the gaming-industry’s recent growth originated, notably more adoption in U.S. states and “a boon in overall consumer wealth that we’ve seen in the aftermath of COVID.”

The survey revealed that “Millennials (those born between 1981-1996) continue to fly the flag for the industry,” Raines said. “They continue to cement themselves as the highest spending with the highest activity in the space.
“But headwinds are on the horizon. We’re not always going to have states coming online. When you look at things like student-debt repayments coming in, at the individual level, there’s going to be an impact.”

One reason why approximately 40% of Millennials participate in betting activities is the availability of discretionary funds. According to the survey, 77% of Millennials stated that their income is “better than planned.” About 51% of Gen Z (those born between 1997 and 2012) participants also said their finances were better than expected.

“The industry needs to start thinking about that next generation and how they can tailor their strategy and experiences in order to capture those individuals,” Raines said. “They’re going to have different and distinct wants compared to prior demographics that may have been the lion’s share of the business.”

One way operators can cater to Millennial and Gen Z bettors is through a multichannel approach. About half of Millennials and a quarter of Gen Z bettors wagered both online and at land-based channels.

“The operators that have the ability to offer that omnichannel experience are absolutely driving ROI,” Raines said. “This industry is truly about scale, your state presence, not only from an online perspective, but from a land-based perspective. The more places you are, the more opportunities you have to capture foot traffic and online traffic. The businesses that have the ability to offer those omnichannel experiences need to capitalize on it.”