The American Gaming Association (AGA) published its latest Gaming Industry Outlook, highlighting that industry leaders are cautiously optimistic about the business situation. While respondents generally believed that the current state of affairs is at least satisfactory, many are still wary of the growth slowdown.
Operators Are Satisfied with the Conditions But Cautious about the Future
According to the AGA, an overwhelming majority of operators (88%) believe that the current state of the American good is either good or at least satisfactory.
When it comes to the future, however, gaming leaders are much more cautious. While some said that they expect conditions to improve over the next three-to-six months (3% net positive), a significant number of respondents told the AGA that they forecast a decrease in customer activity (28% net negative).
In the meantime, 19% of executives said they had easy access to credit, while only 3% said they felt restricted. A lower number of gambling company leaders cited interest rates as a major limiting factor than in Q1 2024.
Additionally, the AGA noted that hotels (56%) and food and beverage facilities (56%) continue to be the main and growing focus of capital investment among gambling companies. Next up is live entertainment at 28% and slot machines at 22%.
The AGA further noted that gaming equipment suppliers have noted that they expect the pace of their capital investment and game sales to decelerate (13% net negative.)
Leaders Are Growing Wary of the Shifting Economic Context
Gaming companies have been wary of the situation since the first quarter of the year. The number of respondents expecting a slowdown has only increased since then. Yet, respondents told the AGA that they expect improvements in their overall balance sheet health (34% net positive).
In any case, operators’ expectations have been affected by the unstable macroeconomic climate with 56% of them citing this as the reason for their conservative expectations. Meanwhile, 31% of operators had regulatory concerns while 34% were wary of inflation, shifting interest rates and geopolitical risk.
In Q3, the Current Conditions index stood at 97.3%. The Future Conditions Index, on the other hand, measured 98.9% in the third quarter of the year, suggesting an upcoming moderate decline.
David Forman, AGA’s vice president of research, commented on the matter, highlighting the cooling growth rates and the expected growth declines.
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.
David Forman, VP of research, AGA
In other news, a recent AGA research emphasized a positive surge in responsible gaming investments.
