Inflation holding back potential of wider US gaming industry
New TransUnion study reveals consumers with stagnant income less likely to gamble
The regulated US gaming industry has been in a period of sustained growth over the past few years but is nonetheless seeing its ultimate potential hindered by the rate of inflation, according to new research from consumer credit reporting agency TransUnion.
In its latest US Gaming Report released on July 26, TransUnion found that while participation in online sports betting increased from 11% in the fourth quarter of 2022 to 17% in the second quarter of 2023, the wider gaming industry shrunk 12% from Q1 2022 to Q1 2023.
The primary cause is inflation, and specifically its impact on the wallets of some consumers.
According to TransUnion’s research, 53% of bettors indicated their income was keeping up with inflation, but just 26% of non-bettors said the same. The result is the latter cohort – comprising coveted would-be bettors – have largely remained non-participants in the gambling ecosystem.
“The majority of the active betting population has experienced rising incomes that outpace inflation, including the key millennial demographic, so they have the means to spend on this type of entertainment,” said TransUnion’s head of gaming business Declan Raines.
“Conversely, most would-be bettors, whose incomes have not kept up with rising costs, are holding back from playing.”
Unsurprisingly, a close correlation exists between income stability and betting activity.
Among consumers whose salaries increased significantly with 69% indicating a likelihood to bet. In addition, nearly a quarter (24%) of consumers making at least $100,000 whose income increased a lot reported depositing over $500 per month for betting activities.
On the other end of that spectrum, a vast majority of consumers whose salaries either stayed the same (83%), decreased a little (77%) or decreased a lot (78%) indicated they were unlikely to bet as a result.
The study also noted that the wallets of many consumers could become even further tightened in October, when student loan repayment programs resume for those who chose to defer payments as part of a longstanding pandemic-era relief initiative.
To conduct its research for the study, TransUnion surveyed 3,000 adults from late April to early May 2023.