AGA’s inaugural Gaming CEO Outlook signals improved market confidence

Image source: American Gaming Association

According to the American Gaming Association’s (AGA) newly launched Gaming CEO Outlook, almost half of its member CEOs expect to see improved trading conditions moving into 2022, signaling greater confidence across the gaming industry.

CEO positivity is being driven, said the Outlook, by anticipated increases in new hiring (71%), wage growth (63%), and capital investment (39%).

Association President and CEO Bill Miller, who gave his annual State of the Industry update at G2E in Las Vegas yesterday, noted that the inaugural Outlook reflects the strength of the sector’s recovery and consumer demand for its “world-class entertainment offerings”. 

“The promising outlook is built on our innovation, but like many industries, supply chain and worker shortages continue to slow our full recovery,” he said.

However, while the overall outlook is positive, challenges remain. More than two-thirds (71%) of CEO respondents cited supply chain issues as a factor limiting operations. Labor force shortages (63%), consumer health concerns (46%), and lagging meetings and events demand (38%) are also widely cited as impeding short-term growth.

The Gaming CEO Outlook, prepared for the AGA by Oxford Economics, provides a snapshot of the current and future economic health of the industry based on executive sentiment, employment, casino visitation plans, gaming revenue, and other key economic indicators. 

The results are informed by a survey of AGA member CEOs and executives representing equipment suppliers, casinos operators, and sportsbooks.

“We are a more resilient industry because of the COVID-19 pandemic,” said Aristocrat Technologies CEO and AGA Chairman Trevor Croker. “As the gaming industry looks to 2022 and beyond, our impressive recovery will continue to create jobs, support communities, and generate needed taxes.”

The Gaming CEO Outlook includes two separate indices, the Current Conditions Index and the Future Conditions Index – both of which reflect strong business conditions.

The Current Conditions Index of 115.1 reflects exceptionally strong growth in gaming revenue, employment, and employee wages and salaries over the past quarter. This represents one of the fastest periods of growth in the industry over the past 20 years. Notably, all CEO panel participants assessed the current gaming business climate as “good” (54%) or “satisfactory” (46%).

The Future Conditions Index, which provides a leading indicator of changes in industry conditions, also shows positive results at 102.7. Nearly half of gaming executives expect future business conditions to further improve from today’s already strong climate, and just 9% expect conditions to deteriorate over the next six months. Among gaming operators, half plan to increase hotel and food and beverage amenities, while 43% plan to increase capital investments in gaming machines.

Gaming suppliers are also optimistic: over the next six months, 75% expect sales of gaming units for replacement use to increase and 63% expect sales of new units to improve. The gaming industry’s recovery, including a record-breaking second quarter, is well underway and current executive sentiment points to a robust end of the year and strong start to 2022.