Washington, D.C. – Gaming CEOs are optimistic about the industry’s continued growth and recovery, according to the American Gaming Association’s (AGA) Gaming Industry Outlook presented in partnership with Fitch Ratings.
More survey respondents (67%) rate the current business situation as “good” than six months ago (54%), while none describe it as “poor.” Meanwhile, four in ten CEOs expect the industry’s business climate to improve over the next two quarters compared to 13 percent that expect business conditions to worsen.
“Gaming executives are signaling confidence in our continued recovery that is in line with record-setting consumer demand for gaming,” said AGA President and CEO Bill Miller. “I’m optimistic that 2022 will see the return of a true sense of normalcy for gaming.”
While gaming CEOs are generally positive about the industry’s economic outlook, they also report macroeconomic impediments to business growth. Top concerns include:
Notably, COVID-19 and demand for meetings and events are no longer among the top five concerns for gaming CEOs.
“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 and the Future Conditions Index.
Current Conditions Index
Despite all-time high commercial gaming revenue through the first two months of 2022, the Current Conditions Index of 93.5 reflects a slowing in casino gaming-related economic activity compared to record industry growth in the fourth quarter of 2021. The index shows that the gaming industry has grown at an annualized pace of approximately 16.5 percent over the last three quarters.
Future Conditions Index
The Future Conditions Index stands at 101.1, reflecting anticipated expansion of casino gaming-related economic activity over the next six months at a modest 1.1 percent annualized rate—a return to normal industry growth after a year of tremendous industry expansion from pandemic-era lows in 2020.
Gaming Executive Panel
The majority of gaming CEOs surveyed (79%) expect the pace of wage and benefit growth to increase over the next three-to-six months, while 50 percent expect the pace of hiring to increase.
Among gaming operators, 53 percent plan to invest more capital than normal in hotel facilities in the coming year, while about one-third plan to invest more than normal in slots on the casino floor (27%) and brick-and-mortar sportsbooks (33%).
Suppliers report increased bullishness for sales growth over the next six months: 100 percent of respondents expect sales of gaming units for new or expansion use to rise; 86 percent expect sales of gaming units for replacement use to rise; and 71 percent expect the pace of their capital investment to rise.
About the Outlook
The AGA Gaming Industry Outlook is presented in partnership with Fitch Ratings and prepared biannually by Oxford Economics. It provides a timely measure of recent industry growth and future expectations. The Q1 2022 survey was conducted between March 21 – April 1, 2022. A total of 24 executives responded, including executives at the major international and domestic gaming companies, tribal gaming operators, single-unit casino operators, major gaming equipment suppliers and major iGaming and/or sports betting operators.
Fitch Ratings is acting as a sponsorship partner in connection with the AGA Gaming Industry Outlook. Views expressed herein do not represent analytical views of Fitch Ratings.
The expansion of legal US sports betting has increased revenues for the lucky few, but responsible gambling seems to only have been supported by a small percentage set aside for gambling treatment. In an often-complex journey to navigate by the consumer what needs to happen beyond just an advertising campaign?
Panelists:
President and CEO
CEO Roundtable: a fireside chat with the AGA and the CGA
The IAGA CEO Roundtable brings the leading executives of North America’s three largest gaming organizations together to discuss their opinions on the hot topics facing the industry within their respective markets. Covering a wide range of issues including what can and should be done to stop the proliferation of unregulated and unlawful gaming including grey machine proliferation, the lessons learned from the pandemic and their predictions for the year ahead, this is unique opportunity to hear from the leaders who help shape public policy and perception about gaming in all its forms.
Moderated by Daron Dorsey, the Executive Director for the Association of Gaming Equipment Manufacturers (AGEM), the panelists include:
Gambling advertising’s race to acquire customers: are we heading for a crash?
In late 2018, Italy’s advertising and communications regulator Autorità per le Garanzie nelle Comunicazioni (AGCOM) introduced a blanket gambling advertising ban aimed at reducing rates of gambling addiction and ratcheting up player protection efforts. This quickly drew the attention of regulators and legislators elsewhere, resulting in tighter advertising restrictions or consideration of bans in other European countries. Given the exploding North American sports betting markets and the corresponding dramatic increase in player acquisition advertising, are we perilously heading toward a similar fate? This panel will take a deep dive into gambling advertising bans, debating issues like whether the European experience could be replicated in the US, whether bans or tighter restrictions have an impact on problem gambling, whether they represent a perceived or real failure of the industry to implement appropriate controls and safeguards, and what effect a bombardment of gambling advertising has on the industry’s reputation. Is gambling advertising a regulatory issue? A responsibility issue? Our panel will aim to answer these questions and more.
Moderated by Cait DeBaun, Vice President – Strategic Communications and Responsibility for the American Gaming Association (AGA), the panelists include:
This newly formed group will convene gaming industry chief marketing and communications officers for the first time. The group will first discuss the implications of the advancement of sports betting and consider a self-regulated advertising model. Going forward, the MarComms Working Group will work together on reputational, marketing and communication issues affecting the industry, and contribute to AGA initiatives in these core areas.
Gaming industry stakeholders and local media packed a lecture hall at UNLV’s International Gaming Institute to hear remarks from:
Resources
Press Coverage Summary
Las Vegas Review-Journal – AGA expanding code of conduct for responsible gaming
Gambling Compliance – Responsible Gaming Advocates Hope Lawmakers Pass Legislation To Help Consumers
Associated Press – Casino trade group updates rules to include sports betting
SBC Summit North America will bring together major players in the fast-growing North American sports betting and iGaming industry for two days of high-level discussions, business meetings, and networking. The event will featuring five American Gaming Association speakers:
WASHINGTON – The executive committee of the American Gaming Association (AGA) is pleased to announce the formation of a seven-member search committee to select the next chief executive of the gaming industry. The new CEO will replace Geoff Freeman, who will be departing the AGA as of the end of July to become president and CEO of the Grocery Manufacturer’s Association. Freeman has been president and chief executive officer of the AGA since May 2013.
The committee will be led by Tim Wilmott, CEO of Penn National Gaming and chairman of board. Its members will include:
“The gaming industry is widely recognized as among the most popular of consumer entertainment experiences and we take seriously our role in providing this experience safely and responsibly,” said Wilmott. “We are also proud to support the creation of strong jobs and tremendous economic value for the communities in which we operate across the United States. The growing impact of our industry, including the opportunity for states to offer legal sports betting, makes this an especially exciting time to lead our membership toward a vibrant future.”
Stacy Papadopoulos, general counsel and SVP of industry services at the AGA, has been appointed as interim CEO until a candidate is named.
“We are grateful to Geoff for his leadership over the last five years and we wish to thank Stacy for taking the helm of the AGA while we identify its next CEO,” said Wilmott.
The search will be supported by Spencer Stuart, one of the world’s leading executive search consulting firms. Leslie Hortum, managing director, will lead the search.
###
About AGA: The American Gaming Association is the premier national trade group representing the $261 billion U.S. casino industry, which supports 1.8 million jobs in 40 states. AGA members include commercial and Tribal casino operators, suppliers and other entities affiliated with the gaming industry. It is the mission of the AGA to achieve sound policies and regulations consistent with casino gaming’s modern appeal and vast economic contributions.
LAS VEGAS – The American Gaming Association’s (AGA) newly launched Gaming CEO Outlook shows confidence in expanded industry growth, with almost half of AGA-member CEOs expecting improved business conditions into 2022. Participating CEO positivity is driven by anticipated increases in new hiring (71%), wage growth (63%), and capital investment (39%).
“AGA’s inaugural Gaming CEO Outlook reflects the strength of our recovery and consumer demand for our world-class entertainment offerings,” said Bill Miller, AGA president and CEO. “The promising outlook is built on our innovation, but like many industries, supply chain and worker shortages continue to slow our full recovery.”
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.
Current Gaming 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%).
Looking Ahead: Expansion Continues
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 nine percent expect conditions to deteriorate over the next six months.
Among gaming operators, half plan to increase hotel and food and beverage amenities, while 43 percent plan to increase capital investments in gaming machines.
Gaming suppliers are also optimistic: over the next six months, 75 percent expect sales of gaming units for replacement use to increase and 63 percent 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.
Miller will deliver his annual State of the Industry update today at 11:45 ET/8:45 PT to kick off Global Gaming Expo (G2E) 2021—the premier event for commercial and tribal gaming professionals.
“Our industry’s return to Las Vegas for G2E is a milestone in our recovery,” Miller said. “G2E 2021 is providing an essential platform for gaming leaders to highlight their latest products, conduct business, and drive our recovery forward.”
About the Outlook
The Gaming Industry Outlook is prepared on the behalf of the American Gaming Association by Oxford Economics. It provides a timely measure of recent growth and future expectations. The Q3 2021 release is the first release of the index, with a planned bi-annual release schedule moving forward. As additional data become available, particularly for the Gaming Executive Panel, the Gaming Industry Outlook will be further refined.
The Q3 2021 survey was conducted between August 16 and September 14, 2021. A total of 24 executives responded, including executives at the major international and domestic gaming companies, tribal gaming operators, single unit casino operators, major gaming equipment suppliers, and major iGaming and/or sports betting operators.
Americans’ favorability toward gaming is growing as the industry expands to new geographies and verticals, according to AGA research.
On a community level, nearly 7 in 10 Americans believe the gaming industry behaves responsibly and a majority (57%) believe the industry gives back in the communities where it operates. And on an economic level, two-thirds of adults view the industry as a positive economic contributor that provides high-quality jobs.
Because of Americans’ positive perceptions of gaming, consumers are also in favor of gaming’s expansion, with 73 percent of adults supporting legalized sports betting in their state.
The gaming industry’s responsible gaming efforts are also continuing to resonate, with the number of Americans who say the industry is committed to responsible gaming increasing by nearly 40 percent since 2018. Moreover, nearly 80 percent of past-year gamblers are aware of industry-provided responsible gaming resources, and of this group, three-quarters point to specific measures like deposit limits, casino employee training, and time limits as most effective.
With Missouri playing an important role in the 2016 presidential election, the state’s casinos today delivered a clear message to Republicans and Democrats alike: look no further than the gaming industry for examples of consistent job creation and robust economic development. The American Gaming Association (AGA) today convened a roundtable forum at Pinnacle’s River City Casino with Missouri gaming executives, St. Louis-area business and community leaders, and state and local elected officials to note the $8 billion in tax and admission revenue generated by the industry since the first casino’s doors opened in the state in 1994.
–
Resources
Press Coverage Summary
Missouri Times – Missouri Should Enact Progressive Policies to Generate More Casino Revenue for State
KSDK NBC (St. Louis, MO) – Casinos Make Pitch to Legalize Sports Betting