The American Gaming Association (AGA) recently completed its Gaming Industry Outlook with Fitch Ratings, showing that gaming CEOs are feeling optimistic when it comes to the continued growth of the gaming industry and the recovery process.
A total of 67% of those surveyed rated current business as ‘good’, which is much higher than the 54% from six months ago. None of the individuals surveyed felt that the description of the industry should be ‘poor’ which is a good sign.
Top Concerns for Now
According to the report, gaming CEOs are generally positive when it comes to the economic outlook of the industry. However, there are concerns that remain. The top three include supply chain issues, inflationary and interest concerns, plus labor shortages. The majority of those surveyed were worried about supply chain issues.
It is important to note that COVID-19 and demand for meetings and events are not at the top of the list anymore. For quite some time, CEOs continued to be concerned about how COVID would affect operations and how meetings and events were not taking place in major areas like Las Vegas and Atlantic City.
COVID caused closures, restrictions on operations, and travel problems that harmed the gaming industry in a major way. Over the past year, with more vaccines available and continued oversight, the casino industry has been able to overcome the obstacles and start the recovery process.
As far as the supply chain is concerned, CEO and President of the AGA Bill Miller pointed out:
“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.”
Current Conditions and Future Conditions Index
Within the Gaming Industry Outlook, the survey reviewed Current Conditions and Future Conditions, providing insight into what is taking place and what could possibly take place in the future. The Current Conditions Index is 93.5 and reflects a slowing of casino gaming economic activity. This is surprising considering that the first two months of 2022 were so strong. The index reports that the gaming industry has grown at an annual pace of 16.5% within the past three quarters.
The Future Conditions Index is 101.1 and it reflects the expected expansion of casino-related economic activity within the next six months. The annualized rate is set at 1.1%. If this comes to fruition, then the gaming industry would see a return to normal growth after a year of industry expansion after the lows seen in 2020 due to the COVID-19 pandemic.
Also, part of the survey was wage and benefit growth. A total of 79% of those surveyed stated that they expect wage and benefit growth to increase within the next three to six months. The hiring pace should increase at a 50% pace.