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AGA Survey Highlights a slower but more sustainable growth rate in Q1 for the US

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In its Q1 report, the American Gaming Association (AGA), outlined “slower but more sustainable” growth for US gaming industry.

According to the AGA Gaming Industry Outlook, Q1 2024’s Current Conditions Index was 102.8. AGA said this corresponded to a real annualised increase of 2.8%. The Current Conditions Index examined economic activities in the US Casino Gaming Industry, including gaming revenues and employee wages.

AGA’s Future Conditions Index measured 102.2 also in Q1, and economic activity is predicted to grow by 2.2% annually over the next 6 months in US gambling. Future Conditions Index is a measure of expected conditions in the US Casino Gaming Industry. It analyses the economic climate, consumer intent and aggregate sentiment from the AGA gaming executive panel. This includes AGA senior level members who are chosen to represent industry.

AGA has received 32 responses to its Gaming Industry Outlook survey from US gaming executives. Executives’ views of the current conditions were moderate, but future prospects showed a slight improvement. Future Conditions Index also showed a stronger economy than initially expected. However, this is likely to decrease over the remainder of 2024.

Slower growth than previous years

According to the AGA Current Conditions Index, real economic growth is expected to be slower in 2023 compared with 2021 and 2012.

The index, however, was still positive, at 102.8. This indicates “solid growth in the industry” despite the high inflation, which somewhat dampened its findings. The index was 108.8 at the end of Q4 2023. This corresponds to an annualised rate of growth of 8.8%.

The growth forecasts of gaming CEOs are about the same as they were six months earlier. Positive responses were 6.3% higher than negative ones, down from 6,4% in the third quarter of 2023.

According to 32% executives, the next three-six months will be a time of improvement. 58% of executives expect the gaming industry to stay about the same. Nine out of 10 people now expect the gaming sector to either improve or remain the same, compared with eight out of 10 in the autumn. Overall, 44% of respondents rated the current situation as good and 50% said it was satisfied.

Additionally, 42% more executives are confident that the overall health of balance sheets will improve. In contrast, 22% of executives predicted that new hires would slow, and 13% said they expected the revenue to remain stagnant.

AGA predicts that growth will slow down further due to “restrictive financial conditions

The AGA predicts, as per the current expectation of US economic growth slowing down over 2024 that the gaming industry will be held back by higher interest rates.

The AGA does expect that the robust labour market will boost the disposable income. The AGA therefore predicts an improved outlook in comparison to six-months ago.

In the CEO survey, 26% of respondents described credit availability as tight. This is down to 19% in this year’s report. Over a quarter (28%) also cited concerns about interest rates as a factor that limited operations, and 34% referred to geopolitical risk. Also, 34% cited uncertainty about the economy as a factor.

The AGA concluded that its Future Conditions Index of 102.2, after allowing for inflation, shows an increase in economic activity within the gaming industry.

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