North American gaming executives positive on current business conditions
In the face of slowing revenue expansion, gaming industry leaders continue to hold an overall positive view of the current business situation, with a notable improvement in credit conditions, according to the latest American Gaming Association (AGA) Gaming Industry Outlook.
The majority of respondents (88 per cent) view the current state of the gaming industry as either good or satisfactory. Meanwhile, executives have a more conservative outlook on future business conditions, with respondents split on whether they expect conditions to improve over the next three-to-six months (3% net positive) and many expecting a decrease in customer activity (28% net negative).
“After years of very strong consumer gaming spending growth, expectations around customer activity over the next three to six months have cooled considerably,” said AGA Vice President of Research David Forman. “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.”
Since Q1, gaming executives’ sentiment has shifted, with a greater number of respondents now expecting a decline in customer activity over the next three to six months (28 per cent net negative, up from four per cent net negative in Q1). Despite this, panelists foresee improvements in overall balance sheet health (34 per cent net positive).
Additionally, more executives reported access to credit as easy (19 per cent) rather than restrictive (three per cent) for the first time in two years, and fewer cite interest rates as a major limiting factor than in the spring.
Hotel (56 per cent) and food and beverage facilities (56 per cent) continue to be the main and growing focus of capital investment among operators, followed by live entertainment (28 per cent) and casino floor slots (22 per cent).
Meanwhile, gaming equipment suppliers now believe their pace of capital investment and game sales will decelerate (13 per cent net negative).
These expectations are impacted by evolving macroeconomic challenges, with uncertainty of the economic environment vaulting to the top of executive concerns (56 per cent, up from 34 per cent in Q1), followed by state regulatory concerns (31%), and inflationary or interest rate concerns and geopolitical risk (both 34 per cent).
