Increased Sports Betting Spending Despite a Recession

Date: December 22, 2023, 05:00h. 

Last updated on: December 22, 2023, 01:34h.

Wagering-related expenses, especially those allocated to slots, table games, and sports betting, exemplify consumer discretionary spending.

Michigan iGaming sports betting online casino
Actor Jamie Foxx appears on a BetMGM billboard. Spending on sports betting could be resilient in a trying economy. (Image: Detroit News)

It could be seen that if consumer spending reduces significantly, there is a potential vulnerability for gaming companies. However, the industry has shown resilience during deep economic contractions in previous recessions. Experts believe sports betting could be resilient even if consumers reduce other entertainment spending.

According to a recent Paysafe survey, online sports bets (18%) and in-game purchases (19%) spending are roughly the same and have been less impacted by the changing economic climate. Together with streaming services, these at-home entertainments may thrive if budgets continue to tighten.

The study indicates that consumer spending changes during the pandemic and subsequent rise in inflation have not affected casino gaming and sports betting significantly.

Sports Betting Qualifies as an Experience

Sports wagering is experiential and is significant at a time when consumer spending is shifting from goods to experiences.

That also bodes well for land-based casino operators, particularly those on the Las Vegas Strip. Gaming venues there offer much more than casinos and leverage high-end entertainment and food and beverage offerings to smooth out gaming revenue volatility.

Non-essential goods and services are receiving less disposable income, while 51% of respondents are prioritizing experiences over other discretionary spending, according to Paysafe’s Lost In Transaction report.

Las Vegas Strip operators can continue posting solid revenue growth and prove resilient even if gaming revenue experiences a modest decline. Food and beverage and entertainment actually bring in more revenue than gaming.

Sports Betting Proving Metal in Tricky Climates

Of all consumer discretionary industries, sports betting is relatively young on the national stage. It came of age during the pandemic and has remained strong amid inflation and high interest rates. Data indicate the next year could be another positive one for the sports betting space.

“Almost half (49%) of consumers are confident the financial situation will improve next year, and 50% say they’ll spend their money differently in 2024 than they did in 2023,” concluded Paysafe.

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