The economy is lurching along in fits and starts. Some companies are doing better than expected. Some companies are not. The test all casino and hospitality companies are facing is how to take advantage of newly developing trends while keeping an eagle eye out for swift changes in the economy.
Sitting down to write this article in November, it is impossible to predict what the economy will be like in January. Casino revenues have been on a record-breaking run. Most reporting commercial gaming companies have expressed optimism for 2023. Recent analytical forecasts for Las Vegas predict a leveling off in 2023 and a downturn in 2024 as inflationary pressures take hold.
Developing Economic Patterns
- Gas prices are affecting regional casinos with long driving distances
- The lower end of the market is showing weakness due to inflation
- The price of food and home heating looks to be a dominant influence on future revenues
- Labor issues remain an ongoing trend
In the light of the changing economy, let’s look at trends affecting the gaming industry in the near future.
Sports Betting Keeps Rolling Along
No other trend in gaming is experiencing growth like sports betting.
According to the American Gaming Association website, there are currently 31 states, plus Washington, D.C., where betting is legally offered through retail and online sportsbooks. Five states have legalized sports betting but are not yet launched. This does not include Tribal gaming, where sports betting operations are growing by leaps and bounds.
According to the AGA commercial gaming 2022 third quarter results press release, “Due to a high sportsbook win percentage and solid growth in existing markets, sports betting set a new quarterly revenue record of $1.68 billion, up 80.6 percent year-over-year. Sports betting revenue through September has already reached an all-time annual high of $4.78 billion, beating 2021’s full-year record of $4.34 billion.”
iGaming Revenues Up
According to the September 2022 United States iGaming Revenue report published monthly by Deke Castleman of CDC Gaming Reports for the six states where online gaming is legal, “Total iGaming revenues for September 2022 in New Jersey, Michigan, Pennsylvania, West Virginia, Connecticut, and Delaware added up to $412.5 million, a generous increase of 20 percent over September 2021’s $329.9 million.”
iGaming demographics worldwide are trending young, according to an article on the Voluum website, “iGaming Industry Statistics for 2022 Explained” by Monika Krawczyk, “If you think most gamblers are represented by middle-aged men playing slots all day long, you’re gonna be surprised to learn that for online gambling, the group is quite young – 70 percent of online gamblers are between the ages of 18 and 39, with 47 percent of them aged 20-29. When it comes to how gamblers are represented between the sexes, men are highly over-represented in online gambling; only 17.6 percent of online gamblers are female, and 82.4 percent are male.”
The Envied Younger Demo Finally Showing Up
While gaming revenues resulted in a strong trend for the bulk of 2022, the body count is down compared to 2019 levels. Younger demographics are a bright spot, now attracted by mobile iGaming and sports wagering. Go figure that the way to younger demographics was through their cherished mobile devices.
Casinos with online gaming and sports betting are seeing a move by younger demographics to brick-and-mortar properties due to cross-pollination from digital and traditional database sources. This is causing casino companies to rethink their amenities and redesign services and attractions to appeal to this younger new trend. Casinos of the near future will need to reimagine hotels, sports bars, entertainment, and sports betting lounges to appeal to a budding younger audience.
The 65+ Demo Is Shrinking
Older demographics pulled a disappearing act during the pandemic and are proving hard to re-establish. Only a portion of this stalwart 65+ older demo remains on the sidelines after shrinking during the pandemic.
Soaring prices and inflationary pressures are also impacting visitation and play for the older demographics on a fixed income. Casino companies are looking to mine existing databases to motivate visitation from this key demographic that was so vital to revenues prior to the pandemic. Common sense tactics like shifting promotional times to earlier in the day, database targeting, and increasing interactions with the 65+ demo will need to be ongoing efforts.
Even More Efficiency
By any measure, casinos today are miles ahead in efficiency since the heady days of 2019.
If the pandemic taught casinos anything, it was to be adaptive to changes and to act with decisive enhancements to operations and marketing. Casinos were efficient businesses that evolved to be more efficient. Operators are prepping for the changes in the economy that will make operations, you guessed it, even more efficient.
Department by department, casino and hospitality operators are reviewing budgets, procedures, marketing, and labor expenses to prepare for an economic downturn that is widely predicted for 2023. Hope for the best and prepare for the worst is the mantra for addressing efficiency today.
Looking for a Brand-New Trend?
If you’re looking to get in on the ground floor, an article in Sportshandle reveals that “On Halloween, Colorado approved wagering on U.S. ProMiniGolf Association (USPMGA) events and, three days later, neighboring Wyoming followed suit.” Betting on ProMiniGolf might be the next big thing– you never know!