The American Gaming Association’s (AGA) Gaming Industry Outlook survey has revealed that the majority of gaming CEOs are optimistic about the industry’s continued growth and recovery.
In partnership with Fitch Ratings and prepared biannually by Oxford Economics, 67% of the survey respondents rated the current business situation as ‘good’, compared to just 54% six months ago, and none of the CEOs surveyed described it as ‘poor’.
Four in ten CEOs surveyed also expect the industry’s business climate to improve over the next two quarters, compared to 13% that expect conditions to worsen.
Commenting on the results, AGA President and CEO Bill Miller said: “Gaming executives are signaling confidence in our continued recovery that is in line with record-setting consumer demand for gaming. I’m optimistic that 2022 will see the return of a true sense of normalcy for gaming.”
The AGA says the Gaming Industry Outlook ‘provides a timely measure of recent industry growth and future expectations’.
Conducted between March 21 and April 1, the Q1 2022 survey had a total of 24 executive respondents, including executives at international and domestic gaming companies, tribal gaming operators, single-unit casino operators, gaming equipment suppliers, and igaming and/or sports betting operators.
While there was a generally positive economic industry outlook by gaming CEOs, they also raised macroeconomic hindrances, including supply chain issues (75%), inflationary and interest rate concerns (67%), and labor shortages (54%).
However, survey respondents no longer see COVID-19 and the demand for meetings and events as part of their top five concerns.
“Like businesses across the country, our industry is grappling with supply chain, labor, and inflation challenges that, if left uncontrolled, could dampen our continued growth and economic outlook,” added Miller.
The Gaming Industry Outlook includes two separate indices: the Current Conditions Index – which stands at 93.5 despite an all-time high commercial gaming revenue through the first two months of 2022 – and the Future Conditions Index – which stands at 101.1.
Regarding the Current Conditions Index, the AGA notes that ‘slowing in casino gaming-related economic activity’ compared to record growth in Q4 2021 has caused the current rating, adding that the industry has grown at an approximate 16.5% annualized pace over the last three quarters.
As for the Future Conditions Index, the association states the current rating reflects the ‘anticipated expansion of casino gaming-related economic activity over the next six months at a modest 1.1% annualized rate’, which would bring the industry back to normal growth following significant expansion on the back of the pandemic affected 2020.
AGA’s Gaming Industry Outlook also revealed that 79% of gaming CEOs believe wage and benefit growth rate will improve over the next three-to-six months, while 50% expect the hiring pace to rise.
53% of survey respondents plan to invest more capital than normal in hotel facilities in 2022, while 27% plan to invest more in slots on the casino floor and 33% into brick-and-mortar sportsbooks.
In terms of gaming units, all respondents expect sales for new or expansion use to grow, 86% believe sales for replacement use to rise, and 71% expect the pace of their capital investment to rise.
The full AGA Gaming Industry Outlook can be read here.
