TransUnion is one of the largest credit agencies and recently it released its quarterly Credit Industry Insights Report (CIIR) for the second quarter of 2022, along with a very interesting online sports betting study that focuses on “Consumer Liquidity and Gaming Participation” in the US market for the same period.
Rising Inflation Effects on Bettors
The report starts off by focusing on the effects of rising inflation on household savings, which have apparently reverted to around pre-pandemic levels. This has an obvious knock-on effect on the available overall budget, meaning there’s also less money going around for entertainment activities such as online sports betting. According to the report, savings are now sitting at 6.3%, close to 2019’s 8.7% – a stark contrast to the peak of almost 34% during the pandemic.
Couple this with rising gas prices and strong fears of recession, and you get the recipe for a change in consumer behavior that easily impacts the gambling industry. To find the correlation between consumer liquidity and the industry’s performance, TransUnion developed the “US Consumer Liquidity Index”. The results suggest that there’s a clear connection between the liquidity index and the gaming index.
The report states that “current and incoming economic headwinds are likely to negatively impact the gaming industry.” This means that by understanding the microeconomics and how they affect the overall economic climate, operators can also get an insight into expected player behavior, allowing for the development of more targeted projections for where the industry is headed on a larger scale.
Affordability Checks Needed
Another factor that’s affecting the betting share of a customer’s wallet is debt. The research has found that the rate at which a player is paying off debt is increased versus the average for the total population. However, it appears that this is somewhat offset by the fact that online sports bettors also show signs of increased usage of credit and dip into their savings more often. On the whole, this leads to a bit more dynamic wallet allocation.
This dynamism also affects sports bettors’ attitude towards their own abilities to cover bills and loans in general. Compared to the total population’s 11%, a total of 16% of sports bettors fear they will not be able to cover their credit card, and 9% of sports bettors fear the same for their personal loans, compared to the total population’s 4%.
As you can imagine, this also elevates the levels at which sports bettors are turning to open new credit cards to cover their bills and loans – 15%, to be precise, compared to only 5% of the total population. The story is the same with personal loans, with 16% of sports bettors ready to take out personal loans to cover bills and other loans, compared to only 6% of the total population. This creates a situation in which 66% of online sports bettors have responded “Yes” when asked if they’ve been in a “past due status for any bill or loan payments for 90 days or longer in the past 12 months”, compared to only 31% in the total population.
This makes affordability checks crucial for gaming operators, the research suggests, saying that those that “incorporate robust consumer insights” into their strategies will be better equipped to identify “risky behavior”. Another great outcome of integrating affordability checks is that it will be hugely socially beneficial, too, helping to “enhance responsible gaming”. And we all know that responsible gaming is the only sustainable gaming there is.