In recent years, humanity has experienced its fair share of major disasters, the latest of which have dented our wallets due to inflation, recession and rising prices. Even though most industries are affected by this, the ramifications are by no means shared equally among them.
Will the gaming market be able to escape unscathed? Let’s see what’s happening behind the scenes.
Land-based casino revenues break all records
Inflation and rising gasoline prices are expected to affect all land-based businesses to some extent; at least it is reasonable to expect such a scenario. However, according to Bill Hornbuckle, CEO of MGM Resorts, that has yet to happen. Not only that; If we look at reports from the American Gaming Association, May revenues for this industry are actually up 7.9% from the same month last year. On top of that, the three months leading up to it broke records, actually surpassing the $5 billion mark in revenue each.
Casino stocks are in a bear market
On the other hand, casino stocks have fallen dramatically, striking fear into the hearts of investors and traders. Looking at some of the big names, Caesars Entertainment shares are down 50% this quarter, Bally’s 40%, MGM Resorts 35%. Given the commercial success of casinos during this period, this is surprising. In fact, most casino executives haven’t noticed any signs of slowing down yet.
What’s behind the gap?
The gap between people’s expectations and market reality is a good example of an educated guess gone wrong. Since most stock trading is done on the basis of speculation, people sometimes succumb to fear of a potential market crash, so they start selling their stocks in a panic. That’s what seems to be happening in this example as well – even though people’s decision to start mass selling their casino stocks seemed quite rational at the time, the market voted otherwise and that’s the situation. which ensues. With most of the world lifting anti-COVID measures, we can expect a likely rebound in travel in 2023.
A different story
While most casinos are in good spirits, not all of them share the narrative. Derek Stevens, who owns three casino properties in Las Vegas, notices an accelerating trend in cash withdrawals from casino ATMs, with each weekend seemingly worse than the next. This resulted in reduced business volume for slots, table games and bars. Hotel bookings in Las Vegas, on the other hand, are stronger than ever. Apparently, the expenses are still there, but slightly redistributed from what tends to be the norm.
What about the online gambling market?
Since the early COVID lockdowns, the online gambling market has been booming, and since playing at an online casino requires you not to spend money on fuel, this is unlikely to have an effect. on the industry. The only thing that could potentially shake it is a reduction in people’s purchasing power, which means they will have to rethink their consumption habits.
Apart from that, the online gambling market is quite well positioned, with many technological additions being implemented almost daily, ranging from chatbots to personalization and live games. This is further reinforced by the fact that access to the internet and smart devices is now more affordable than ever. In states where gambling is legal, things are going very well in the online space. In fact, the online gambling market is expected to reach $1 trillion this year. For an overview of the performance of the UK online gambling market, check out the source below.