U.S. Mobile Sports Bettors Have High Incomes, Trouble Paying Bills, Survey Says

September 1, 2022
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Despite inflation negatively affecting U.S. personal spending, many in the gaming industry remain bullish and continue to expect record revenues for 2022, but new research has found that once inflation hits 6 percent there will be a decline in gaming revenue and consumer liquidity.

Despite inflation negatively affecting U.S. personal spending, many in the gaming industry remain bullish and continue to expect record revenues for 2022, but new research has found that once inflation hits 6 percent there will be a decline in gaming revenue and consumer liquidity.

The finding was the key trend researchers found in a TransUnion report released on Wednesday (August 31) examining the financial status and behaviors of consumers who engage in mobile sports betting.

The survey findings suggest inflation will have several effects on the sports-betting industry, said Declan Raines, head of U.S. gaming with TransUnion.

“The biggest is how it is impacting liquidity overall. You are definitely seeing that impact on spending on the consumer level,” Raines told VIXIO GamblingCompliance.

On an individual level, “you are seeing that people are changing their behaviour due to concerns around inflation … that is discretionary spending or other elements of their financial spending,” Raines said.

“They are altering their spending due to inflation and that’s spilling over into the industry.”

During the coronavirus pandemic, three stimulus measures by two different U.S. administrations resulted in a steep rise in consumer liquidity as most people set aside more for savings while paying down debt.

For example, each adult would have received $3,200 in stimulus funds over two years, while an average married couple without children received $6,400, plus an average of $2,500 over the two years for each qualifying child.

The rise in consumer liquidity has been followed by record increases in gaming industry revenues in 2021 and into the start of this year.

U.S. commercial gaming generated $14.85bn in the second quarter, up 9.1 percent from $13.6bn in the same period last year. For the first half of the year, commercial gaming operations generated $29.08bn in gross gaming revenue, up 18 percent from the $24.8bn in the first half of 2021.

However, the TransUnion survey also found that liquidity rates are on the decline as the Federal Reserve raises interest rates to try and bring down inflation.

The annual inflation rate for the U.S. was 8.5 percent for the 12 months ended July 2022, with the Federal Reserve’s Federal Funds Rate currently at 2.25 percent to 2.50 percent.

The report found mobile sports bettors are aware of the impact inflation is having on consumers, with 38 percent having saved more for an emergency during the second quarter of the year, compared with just 28 percent of the population.

Researchers found these 33 percent of mobile sports bettors also are paying down their debt faster than the general public at 25 percent, but those same gamblers were also more likely to use available credit (33 percent to 20 percent) and retirement savings (22 percent to 14 percent).

The report found that more than half (54 percent) of mobile sports bettors earn $100,000 or more annually yet many of the 2,739 adults surveyed were more concerned about paying their bills or loans each month.

Overall, 79 percent of bettors reported concern, compared with 52 percent of the total population. More specifically, 16 percent of sports bettors anticipated not being able to pay off credit cards, and 9 percent expressed concern over paying personal loans.

In addition, mobile sports bettors are using payday lending services at higher rates than the total population.

The TransUnion report also noted mobile sports-betting companies face challenges in identifying resilient or distressed customers, especially those operators that rely solely on first-party data are limiting their view of a player.

Raines said first-party data is generally transactional data that the operators’ themselves collect from their platforms, including bets placed, deposits, withdrawals and similar transactions.

But those operators that did not limit their view of their players with first-part data only, the report found, were able to do a better job of monitoring player stability and assess risky behavior, leading to appropriate interventions, such as cooling-off periods.

“Operators are at a significant advantage for enhancing responsible gaming practices when they leverage third-party data as is common in other global markets and the UK,” the report found.

Raines told VIXIO that TransUnion sees third-party data at very least as complementary to first-party data.

“The way I think about how third-party data can help here is it can apply more context … behind someone’s play,” he said. “If you see if someone is playing in what traditionally might be described as a risk behavior or problematic play, maybe you see that there are chasing loses.”

“But if you look at third-party data, maybe you see this person does have the income to be able to afford this type of play. Maybe you see stability elsewhere in other pieces of information; conversely size of wagers and first-party data can miss some problematic behaviors.”

Raines stressed that wealth is not always necessarily the defining metric behind what constitutes problematic play.

Sometimes, he said, those who are wagering smaller amounts have “declared bankruptcy in the last year or has other information that would certainly change that opinion on that players’ behavior."

         

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