The U.S. economy performed better than expected during 2023, as the Fed’s interest rate hikes helped to curb inflation and jobs data remained strong throughout the year.
Yet, there remain frailties in the economy as global supply chains still recover from the COVID pandemic and global insecurity in Europe and the Middle East. And gaming is exposed to these frailties, according to TransUnion.
TransUnion, a global information and insights firm, has produced a report analyzing gaming spend trends in Q4 of 2023, finding that declining consumer liquidity is dampening the national gaming industry.
The research comprised an online survey of 3,000 adults in late September to early October 2023, as well as an analysis of gaming industry performance and consumer liquidity, leveraging TransUnion’s proprietary CreditVision attributes.
While the U.S. avoided a technical recession last year, consumer confidence is at a low ebb and with low confidence comes caution. As gaming is a discretionary spend for individuals, betting activity went down 10% year-over-year in the second half of 2023.
Across most generations, betting activity declined as study participants admitted their personal finances were not as good as they anticipated; the only anomaly was millennials, 77% of which stated their personal finances were better than expected.
“TransUnion’s continued research has found that betting activity is inextricably tied to increased liquidity,” said Declan Raines, Head of TransUnion’s gaming business. “When consumers find extra cash, they are far more likely to wager it.”
For Q4 2023, 24% of respondents said they had engaged in betting activity. This was broken into 32% of Gen Z participants, 40% of Millennials, 19% of Gen Xers and 10% of Baby Boomers.
Despite this trend, participation at land-based casinos has slightly increased, while online tended to have a higher percentage of top-spending bettors. Land-based lottery (77%) and land-based casinos (74%) had the highest participation rates among bettors.
But TransUnion data showed that online sportsbooks and online lottery (15% each) had the highest share of high-value bettors defined as those who deposit over $500 per month.
Around 45% of those who bet do so across all verticals (online casino, land-based, sports betting, etc.) but this figure increases to over 75% when looking at those who bet over $500 per month.
These are the most valuable players, TransUnion argues, as they not only wager more but do so across more channels.
The report further highlights that the share of those who bet amongst all channels increased from 71% to 83% from Q3-Q4, and this was solely down to those who bet over $500 per month going from multiple channels to all gaming channels.
Consequently, the firm states, strategies aimed at horizontal expansion were clearly working, suggesting despite overall participation being down, betting activity was more expansive among existing player bases.
“Acquiring high-value bettors is critical for an operator’s success. However, knowing exactly how to engage this group requires robust third-party data,” Raines added. “There is a complex set of financial signals that require deep analysis to differentiate between resilient and distressed players.”
