Consumer Discretionary Spending Cuts Don’t Affect Sports Gambling

A new study by Paysafe has revealed that consumers, although tightening their purses otherwise, are looking to continue spending on online sports wagers and in-game purchases.

This means that gaming companies that have digital exposure may not feel the pinch of an immediate economic downturn as online spending and experiences would continue to remain a preferred option for consumers.

There is also sufficient data to rebut doomsayers who expect inflation to bite into casino resorts’ purses may be blowing the issue out of proportion.

Consumers Prioritize Experiences and Stay-at-Home Entertainment

Streaming services and stay-at-home entertainment are beginning to gather momentum, Paysafe notes, considering the previous years that were marked by the onset of the COVID-19 pandemic, and the subsequent recovery from it.

Although gambling operators have turned mostly a profit, and many states around the United States have posted record-breaking revenue across sports gambling and online gambling, the land-based sector is still flagging. This though has enabled consumers to sustain their online spending habits driving sports betting up, and not all brick-and-mortar venues are affected equally.

Not all is bleak in the land-based sector, and Paysafe estimates that businesses which offer strong experiences over physical goods would do well. This is to say gaming companies should in theory perform better even in the land-based sector, as they create multi-tiered experiences that are not directly tied only to their gaming floors.

Land-Based Venues More Resilient Than the Economy Suggests

Places such as Las Vegas and Atlantic City are built around a 360-degree experience, which means that these brick-and-mortar properties are well-equipped to satisfy demand even if in-person entertainment’s prospects seem to be dimming on paper, edged sideways by home entertainment.

Some 51% of consumers prefer experiences, the report said. In other words, gaming may be a hook, but casino companies pull in a lot of revenue from lodging, food, and beverage, and not least the customary performances by world-known artists. When it comes to sports gambling, though, it is evident that consumers are not going to budge and would instead stick to their spending habits despite increasing costs of living.

The survey’s findings are reflected in the estimates of several analysts who have remained bullish on the stocks of popular gaming and entertainment companies, including Las Vegas Sands, MGM Resorts International, Caesars Entertainment, and Penn Entertainment.