Retail

Gaming industry foresees strong 2022

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October 6, 2021

Gaming industry leaders are highly upbeat about 2022 despite supply chain and labor challenges. The generally positive outlook is the theme of the Gaming CEO Outlook, which was presented by the American Gaming Association, at the Global Gaming Expo in Las Vegas on Tuesday.

The positivity is driven by anticipated increases in hiring (71%), wage growth (63%), and capital investment (39%).

"AGA's inaugural Gaming CEO Outlook reflects the strength of our recovery and consumer demand for our world-class entertainment offerings," Bill Miller, AGA president and CEO, said in a prepared statement during his annual State of the Industry update at the expo. "The promising outlook is built on our innovation, but like many industries, supply chain and worker shortages continue to slow our full recovery."

While the overall outlook is positive, challenges remain. More than two-thirds (71%) of CEO respondents cited supply chain issues as a factor limiting operations. Labor force shortages (63%), consumer health concerns (46%), and lagging meetings and events demand (38%) were also widely cited as impeding short-term growth.

The Gaming CEO Outlook, prepared for the AGA by Oxford Economics, provides a snapshot of the current and future economic health of the industry based on executive sentiment, employment, casino visitation plans, gaming revenue and other key economic indicators. The results are informed by a survey of AGA member CEOs and executives representing equipment suppliers, casinos operators, and sportsbooks.

"We are a more resilient industry because of the COVID-19 pandemic," Aristocrat Technologies CEO and AGA Chairman Trevor Croker, said in a prepared statement.

The Current Conditions Index of 115.1 reflects exceptionally strong growth in gaming revenue, employment and employee wages and salaries over the past quarter. This represents one of the fastest periods of growth in the industry over the past 20 years. Notably, all CEO panel participants assessed the current gaming business climate as "good" (54%) or "satisfactory" (46%).

The Future Conditions Index, which provides a leading indicator of changes in industry conditions, also shows positive results at 102.7. Nearly half of gaming executives expect future business conditions to further improve from today's already strong climate, and just nine percent expect conditions to deteriorate over the next six months.

Among gaming operators, half plan to increase hotel and food and beverage amenities, while 43% plan to increase capital investments in gaming machines.

Gaming suppliers are also optimistic: over the next six months, 75% expect sales of gaming units for replacement use to increase and 63 percent expect sales of new units to improve.

The gaming industry's recovery, including a record-breaking second quarter, is well underway and current executive sentiment points to a robust end of the year and strong start to 2022.

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