AGA survey highlights slowed but more sustainable Q1 growth in US

The AGA Gaming Industry Outlook revealed that the Current Conditions Index for Q1 2024 stood at 102.8. According to the AGA, this figure aligns with a real annualized growth of 2.8%. The index reflects economic activities within the USA casino gaming sector, including gaming revenues and employee earnings.

The AGA’s Future Conditions Index was reported at 102.2 for Q1, forecasting a 2.2% annualized growth in the US gaming sector over the next six months. This index predicts the future trajectory of the industry, assessing the economic climate, consumer behavior, and the collective sentiment of the AGA’s executive panel, comprising high level members representing the industry.

For its Gaming Industry Outlook, the AGA collected opinions from 32 executives at US gaming firms. While current conditions received moderate feedback, the outlook for the future showed a slight improvement. The Future Conditions Index suggested a more robust economy than initially anticipated, though a slowdown is expected through the remainder of 2024.

Growth slower compared to previous years

The AGA’s Current Conditions Index indicated that economic activity in 2023 was slower compared to 2021 and 2022.

Nevertheless, the index value of 102.8 signifies "solid industry growth," despite the dampening effect of high inflation. This follows a Q4 2023 index reading of 108.8, corresponding to an 8.8% annualized growth rate.

Gaming CEOs’ growth expectations remained consistent with six months prior. Positive responses exceeded negative ones by 6.3%, a slight decrease from 6.4% in Q3 2023.

Looking ahead, 32% of executives anticipate improvements over the next three to six months, while 58% believe gaming activities will stabilize. The proportion of executives expecting stability or improvement in the sector rose to nine out of ten, up from eight in ten last autumn. In total, 44% of executives viewed the current situation positively, while 50% rated it as satisfactory.

Moreover, 42% of executives were optimistic about improvements in overall financial health, though 13% foresaw stagnant revenue growth and 22% anticipated a slowdown in new hires.

AGA expects further slowdown with "restrictive" financial conditions

The AGA predicts that the US economy's deceleration over 2024 and higher interest rates will continue to challenge the gaming industry.

However, a strong labor market is expected to bolster disposable income, leading to a more optimistic forecast than six months earlier.

In terms of financial accessibility, 19% of executives described credit conditions as stringent, down from 26% in the previous survey. Additionally, 28% cited concerns over interest rates as operational constraints, while 34% identified geopolitical risks and economic uncertainties as limiting factors.

In conclusion, the AGA's Future Conditions Index value of 102.2, adjusted for inflation, indicates an anticipated rise in economic activity within the gaming sector.