Sports betting can survive decline in consumer spending
Gambling-related spending, whether it’s slot machines, table games or sports betting, is the epitome of consumer discretionary spending.
This means that if consumer spending falls significantly, bookmakers could be affected. Previous recessions bear this out, although overall the industry has proven resilient during periods of severe economic downturns. So it's perhaps not surprising that some experts believe sports betting could be resilient even as consumers limit other forms of entertainment spending.
Spending on online sports betting (18%) and in-game purchases (19%) is roughly the same and is less affected by changes in the economic environment,” according to a recent Paysafe survey.“As budgets continue Tighten up, and these home entertainment options may thrive alongside streaming services. "
Research shows that the way consumers use dollars to buy non-essential goods and services has changed since the onset of the coronavirus pandemic in early 2020 and the subsequent rise in inflation in 2021 and 2022. But these changes do not affect casino games and sports betting.
Sports betting is viewed as an experience
Although critics tend to argue this point, sports betting is experiential, which is important in an era when consumer spending is shifting from commodities to experiences.
This also bodes well for land-based casino operators, especially those on the Las Vegas Strip, where gaming venues often offer more than casinos and use high-quality entertainment and food and beverage products to offset gaming-related volatility. income.
“Many consumers have less disposable income to spend on the physical goods they love. 32% are spending less on clothing and 31% are spending the same amount on home appliances and other gadgets. ” added Paysafe.
The company’s Deal Lost report found that “51% of respondents prioritize experience over other discretionary spending.”
Despite a slight decline in gaming revenue, Las Vegas Strip operators continued to see solid revenue growth and demonstrated resilience. That resilience also refutes the idea that Las Vegas casino companies derive most of their revenue from gambling. In fact, dining and entertainment generate more revenue than gaming.
Sports betting proves its worth in difficult climate
Compared to other consumer discretionary industries, sports betting is still young nationwide.The Supreme Court’s ruling on the Professional and Amateur Sports Protection Act (PASPA) was released in 2018. But regulated sports betting came of age during the darkest days of COVID-19 in 2020, when many Americans were confined to their homes and denied access to other discretionary venues like amusement parks, museums and theaters.
Recently, bettors have turned to sports betting amid soaring inflation and the highest interest rates in two decades. Data suggests that next year could be another positive year for the sports betting industry.
Paysafe concluded: “Almost half (49%) of consumers believe their financial situation will improve next year, and 50% say they will spend their money differently in 2024 than in 2023.”
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Source: www.casino.org
