New research from TransUnion indicates that, while gaming companies are reporting positive Q4s so far, a slow-down could be on the horizon.
In its new Consumer Pulse Online Sports Betting Study, TransUnion found that almost half of sports bettors are starting to curb their gambling budgets in the final months of 2022. Research also indicated betting has declined from 19% of people polled in Q2 to 11% of Q4 respondents.
Millennials saw the biggest drop off in betting activity
TransUnion’s Gaming Index peaked at just north of 180 in June 2021 but has been on the decline ever since. As the year wrapped up, the number was at just below 120, the lowest it has been since September 2019.
Millennials, which are the largest segment of bettors saw participation drop from 38% in Q2 to 22% in Q4.
“While Millennials and high-value bettors have held back from gaming, operators should focus their efforts to stay engaged with them,” said Declan Raines, Head of U.S. Gaming at TransUnion. “These groups are a key market segment and, given their optimism for personal finances over the next 12 months, are much more likely to become return players when the economy bounces back.”
High-value bettors are more optimistic about their overall finances
The good news for the industry is that bettors in a solid financial position are proving to be more resilient than other groups. Despite 66% of bettors spending $500 or more a month on sports betting believing the country is in a recession, they are continuing to largely maintain their betting habits. However, this could be coming at the expense of other things.
Higher value bettors are putting away less in savings and upping their credit usage 13% more in Q4 compared to Q2. The number of those bettors dipping into their retirement fund also rose 18%.
These bettors are also more optimistic about their financial future in 2023 than the average non-bettor. While only half of non-bettors have optimism about their financial position improving, a full 82% of high-value bettors believe things are on the rise for them financially.
These high-value bettors are also in the minority in that they are upping their discretionary spending while casual and non-bettors are tightening their bootstraps.
Economic headwinds remain and gaming industry will need to respond
A good chunk of bettors overall, meanwhile, are concerned about being able to pay their bills. Of those surveyed, 42% of bettors responded they were concerned about meeting financial responsibilities compared to 27% of non-bettors.
The TransUnion research indicates that these high-value customers are more resilient than both other sports bettors and people in general. With that in mind, the report suggests a marketing approach that ensures the quality of bettor over quantity in 2023.
“Mobile sports bettors are not monolithic, especially in the high-value segment,” said Raines. “As operators are focused on acquiring and retaining a sustainable pool of players, they’ll need access to rich data sources to help them identify sustainable players.”
Additionally, sportsbooks need to think about ways to keep Millennials interested in the industry, as they tend to have both higher incomes and bigger discretionary spending budgets than other generations. The TransUnion report did suggest though that Baby Boomers are still an untapped market given their general reticence to be early adopters of technology.