Posted on: October 14, 2023, 09:18h.
Last updated on: October 14, 2023, 09:18h.
The Impact of Weight-Loss Drugs on the Casino Industry
In a recent report, Bank of America analysts identified the potential impact of weight-loss drugs on various industries, including casinos. The rising popularity of drugs like Novo Nordisk’s Ozempic and Wegovy could have significant consequences for the gaming sector.
The analysts highlighted that obesity is linked to problem gambling, and problematic bettors contribute 10% to 30% of casino industry revenue. As some of these bettors are also obese, the broader adoption of weight-loss drugs could pose challenges for the gaming industry.
“This implies the usage of GLP-1 could create a 0-4% revenue headwind for US commercial gaming with higher risk for slot machines or regional gaming,” wrote Kelley, a Bank of America analyst.
Pharmaceuticals such as Novo Nordisk’s Ozempic and Wegovy, as well as Eli Lilly’s Mounjaro, are gaining traction among doctors and patients as weight-loss treatments.
Impact on Other Industries
The casino industry is not the only one that could be affected by the growing usage of weight-loss drugs. Traditional food and beverage producers, retailers, and fast-food chains may face challenges as consumers opt for healthier choices.
Analysts suggest that brands in the athletic apparel sector could benefit from the trend towards healthier lifestyles, as consumers focus on exercise and weight management.
Morgan Stanley predicts that the weight-loss drug market will reach $77 billion by 2030, driven by increased demand and insurance coverage.
Casino Stocks to Watch
Bank of America is monitoring several casino stocks, including Boyd Gaming, Caesars Entertainment, MGM Resorts International, Penn Entertainment, and Red Rock Resorts, for potential effects from the broader adoption of weight-loss drugs.
While MGM and Caesars may benefit from increased travel due to weight loss, regional operators like Boyd and Penn could face challenges as consumers prioritize healthier living. Red Rock Resorts, located in Nevada, may also be impacted as the state ranks 33rd in terms of healthiness.