According to the American Gaming Association’s Gaming CEO Outlook, which was released on Tuesday in collaboration with Fitch Ratings, gaming executives are still optimistic about the current state of the gaming industry.
The industry outlook showed that:
- A vast majority of gaming executives considered the current business condition good (43%) or satisfactory (55%)
- The remaining executives were split between expecting better or worse conditions
Over half of these executives also suggested conditions would stay the same (58%) in the following months when asked about the future projections of the gaming market.
This result, however, showed a slight change in the gaming executives’ choices in the first quarter of the year, when 62% said things were good and 35% said they were satisfactory.
Current Conditions Index reported to be better than Future Condition Index
The Current Conditions Index read 100.6, which indicates a 0.6% increase in economic activity connected to US casino gambling in Q3 2023 over Q2 2023. On the other hand, the yearly industrial economic activity for the next six months is projected to undergo a slight decline, according to the Future Conditions Index, which currently sits at 99.6.
The Current Conditions Index was moderated by relatively high inflation until Q3 2023, given that casino revenue and wages for employees are adjusted for inflation. The AGA report reveals the start of Q4 2023; the US economy will go through a little downturn.
Despite the predicted decline in expenditure by customers, survey responses show that over one-third of adult customers will make a stop at casinos in the coming year.
Gaming executives speak on limitations affecting current business condition
58% of executives highlighted a few factors that have troubled the business condition, and the predominant limitations that were mentioned included:
- Interest rate
- Economic uncertainty and more
In the past six months, the optimism of CEOs has somewhat increased. Overall, in the survey, this quarter had a 6.4 percentage point more optimistic response compared to Q1 2023. And a 4.1% negative response for factors like future business conditions.
In the AGA Gaming CEO Outlook, Bill Miller, AGA president and CEO, said the industry is still committed to moving forward stronger despite the new changes and regulatory constraints:
“The significant expansion and record demand for legal, regulated gaming in the post-pandemic era have allowed our members to consistently invest in our product and people to deliver innovative entertainment options for American adults. Gaming CEOs remain focused on delivering world-class entertainment options against the backdrop of broader economic uncertainty.”
However, in terms of revenue growth, gaming executives anticipate a decrease (13% net negative) and new hiring to be down (19% net negative). Despite this, they still project overall balance sheet health to grow (26% net positive) and still hope for increased capital investment and operational gaming units.