Betting Activity Slowing Because of Stagnant Consumer Liquidity

Posted on: January 25, 2024, 09:58h. 

Last updated on: January 25, 2024, 10:06h.

A new report from TransUnion on the US gaming industry reveals that betting activity slowed in the second half of 2023 as consumers faced an array of economic headwinds and reined in their gaming spend as a result.

TransUnion gaming betting activity
Gamblers play roulette at Rivers Casino in Pittsburgh. Millennials were a bellwether for the US gaming industry in the fourth quarter of 2023. That’s according to TransUnion, which this week unveiled its 2023 report on betting activity. (Image: AP)

In the latest edition of the consumer credit reporting agency’s “Consumer Pulse: US Gaming Report,” TransUnion researchers say the US economy continues to defy expectations and has remained resilient despite lingering inflation.

While the stock market has managed to climb and unemployment hovers near record lows, consumers aren’t expressing as much confidence as the data points might otherwise suggest.

TransUnion says consumer delinquencies are rising, credit card debt has gone upwards of $1 trillion for the first time, and federal student loan payments restarted in October. As a result, consumer liquidity declined by 1% in the fourth quarter of 2023.

Cautious Consumers Gamble Less

With consumer liquidity stagnating and declining in the second half of 2023, TransUnion reports that gaming spend slowed considerably.

A more cautious consumer may weigh heavily on the gaming industry,” the TransUnion note read. “Gaming participation in the fourth quarter registered its lowest reading of the year; 24% of consumers said they participated in some kind of betting activity, down from 28% in the previous quarter.”

TransUnion says overall consumer betting activity was down 10% in the latter six months of 2023.

“While consumers continued to spend overall, they appeared to be more discerning about how to allocate their discretionary budgets as they navigate economic challenges and stare down an uncertain future,” the findings continued.

TransUnion advises casinos and online gaming firms to adapt to the changing consuming spending sentiments, as the research outlook believes it’s imperative that gaming operators “target players most likely to engage in long-term, sustainable play.”

“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.”

About 59% of Gen X and 86% of Baby Boomers told TransUnion that their household finances are “as planned” or “worse than planned.” About 51% of Gen Z respondents said their finances are “better than planned.” Millennials expressed the most financial cheer, with 77% saying their money situation is “better than planned.”

Existing Players Expand Activity

Though the headline is that betting activity slowed 10% in the latter half of 2023, TransUnion says there were some bright spots in the fourth quarter.

The financial services firm said the share of players who bet across all channels (land-based casino, iGaming, land-based sportsbook, online sportsbook, land-based lottery, and online lottery) grew to 50%. More than eight in 10 gamblers participated in at least two channels.

For operators, strategies aimed at horizontal expansion are clearly working, suggesting despite overall participation being down, betting activity was more expansive among existing player bases,” the report explained.

Millennials, with their better-than-expected finances, continued to increase their betting activity while the other generations scaled back their play. Millennials accounted for 50% of all bettors in the fourth quarter.

Millennials, however, own roughly half of the outstanding student debt in the country. With federal student loan repayments resuming, TransUnion says there may be pullbacks in discretionary spending among the demographic.

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