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AGA: Gaming CEOs maintain positive business outlook for 2022

20 Apr 2022

(PRESS RELEASE) -- Gaming CEOs are optimistic about the industry’s continued growth and recovery, according to the American Gaming Association’s 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 10 CEOs expect the industry’s business climate to improve over the next two quarters compared to 13% 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:

- Supply chain issues (75%).
- Inflationary and interest rate concerns (67%).
- Labor shortages (54%).

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.
 
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