Gaming Industry Rebounded in First Half of 2023, But Deferred Student Loan Repayments Loom

Rhea-AI Summary

TransUnion (NYSE: TRU) releases report on the financial health and behaviors of gambling consumers, revealing a rise in mobile sports betting participation and the impact of inflation on consumer wallets.

Positive

• Mobile sports betting participation rose from 11% in Q4 2022 to 17% in Q2 2023, indicating a growing trend in the industry.
• The broader gaming industry saw growth in Q1 2023 due to major sporting events, but was down 12% compared to Q1 2022, largely due to inflation's impact on consumer wallets.

Negative

• The report does not provide specific financial figures or percentages related to the impact of inflation on consumer spending in the gaming industry.

New TransUnion report examines financial health and behaviors of gambling consumers

CHICAGO, July 26, 2023 (GLOBE NEWSWIRE) -- Participation in mobile sports betting rose slightly, from 11% in Q4 2022 to 17% in Q2 2023, according to new research by TransUnion (NYSE: TRU). Meanwhile, the broader gaming industry grew in Q1 2023 due to major sporting events, such as the Super Bowl and March Madness; however, it was still down 12% compared to Q1 2022.

The trend is largely due to inflation’s impact on consumer wallets. More than half of bettors (53%) agreed that their income was keeping up with the rate of inflation while less than one-third (31%) said they disagreed. In contrast, just over a quarter of non-bettors (26%) said their income was keeping up with inflation while more than half (51%) said it was not.

The research comprised an online survey of 3,000 adults in late April to early May 2023, as well as an analysis of gaming industry performance and consumer liquidity, leveraging TransUnion’s proprietary CreditVision® attributes. A full report of the findings is available in the new “TransUnion U.S. Gaming Report.”

“The majority of the active betting population has experienced rising incomes that outpace inflation, including the key millennial demographic, so they have the means to spend on this type of entertainment,” said Declan Raines, head of TransUnion’s gaming business. “Conversely, most would-be bettors, whose incomes have not kept up with rising costs, are holding back from playing.”

Consumers Likelihood to Bet Based on Income Change  

	Increased a Lot	Increased a Little	Stayed the Same	Decreased a Little	Decreased a Lot
Yes	69%	31%	17%	23%	22%
No	31%	69%	83%	77%	78%

Further in line with this finding is that consumers whose income has increased by a lot are not only more likely to bet, but also likelier to bet much more. About a quarter (24%) of high-income consumers (those with incomes of $100,000+) whose income increased a lot said they deposit over $500 per month for betting activities, compared to only 9% of high-income earners whose income stayed the same and 10% of high-income earners whose income increased a little.

Uneven impact for student loan repayments
Beginning in October, student loan payments will resume for consumers who chose to defer payments under the pandemic-era student loan relief program. This will undoubtedly have an impact on consumer liquidity for most bettors and could reduce their level of activity.

However, it will likely be less of an issue for high-value bettors, those who deposit more than $500 per month for betting activities. Roughly two-thirds of student loan debt is held by prime and below consumers. High-value bettors by contrast, are disproportionately in the above prime segments, suggesting student loan payments could have less of an impact on this group.

Bettors at heightened risk for fraud
The report also found that, while bettors and non-bettors were targeted by fraud schemes at roughly the same rate, bettors were more than twice as likely to have fallen victim to a fraud attempt. That risk varied among types of fraud, with the highest rate of bettor victimization stemming from online and phone fraud.

Consumers Who Fell Victim to Online or Text/Call Fraud Attempts in Past Three Months

Online High-Value Bettors	Online Bettors		Non-Bettors
22%	17%		7%

“Bettors’ risk of fraud has implications for operators as well,” said Raines. “Leveraging fraud solutions can help operators prevent account takeover and enhance account security for their players without applying unnecessary friction.”

Operators interested in protecting their business and players from fraud should consider leveraging TransUnion’s flagship identity and fraud solution line, TruValidate™.

For more information about the research, read the “TransUnion U.S. Gaming Report.”

RESEARCH METHODOLOGY 
This online survey of 3,000 adults was conducted April 25–May 9, 2023 by TransUnion in partnership with third-party research provider, Dynata. Adults 18 years of age and older residing in the United States were surveyed using an online research panel method across a combination of desktop, mobile and tablet devices. Survey questions were administered in English. All states are represented in the study survey responses. To ensure general population sample representativeness across United States resident demographics, the survey included quotas to balance responses to the census statistics on the dimensions of age, gender, household income, race and region. Generations are defined as follows: Gen Z, born 1995–2005; Millennials, born 1980–1994; Gen X, born 1965–1979; and Baby Boomers, born 1944–1964. These research results are unweighted and statistically significant at a 95% confidence level within 1.79 percentage points based on calculated error margin. Please note some chart percentages may not add up to 100% due to rounding or multiple answers being accepted.

About TransUnion (NYSE: TRU) 
TransUnion is a global information and insights company with over 12,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good^® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business

Contact	Dave Blumberg
	TransUnion
E-mail	david.blumberg@transunion.com
Telephone	312-972-6646

FAQ

What is the impact of inflation on consumer wallets in the gaming industry according to TransUnion's report (NYSE: TRU)?

The report shows that inflation has impacted consumer wallets, with the broader gaming industry down 12% compared to Q1 2022.

How has mobile sports betting participation changed according to TransUnion's report (NYSE: TRU)?

Mobile sports betting participation rose from 11% in Q4 2022 to 17% in Q2 2023, indicating a growing trend in the industry.

What is the likelihood of consumers to bet based on income change according to the report by TransUnion (NYSE: TRU)?

Consumers whose income has increased by a lot are not only more likely to bet, but also likelier to bet much more, indicating a correlation between income growth and betting behavior.