It should surprise nobody that fears of an economic recession have caused many American adults of legal gambling age to cut back on discretionary spending, something that TransUnion’s U.S. Gaming Report for the first quarter of 2024 reflects.

But a stealth threat to gaming growth this year lurks in loans. Millennials, who are far and away the most active demographic in the industry (they made up 50% of all bettors in the fourth quarter of 2023, per TransUnion), own roughly half of all student debt. And in October, a pandemic-related pause on paying down student loans ended, with 20% of all adults surveyed by TransUnion forced to resume payments.

“As Millennials have been the most important segment for betting activities, it will be crucial for operators to understand the liquidity position of their players and their abilities to absorb negative liquidity shocks without impacting their play,” the report read. “While most of this group  also earns high incomes, an additional $800 or $1,000 monthly payment can still reduce an individual’s liquidity — which could mean a limited capacity to engage in betting or the potential to veer into problem gambling.

“Student loans may put additional strain on consumer liquidity and serve as a headwind for the industry. … As gaming operators prepare to adapt to these changes in consumer spending and sentiment, it’s imperative they target players most likely to engage in long-term, sustainable play.”

iCasino players no riskier than sports bettors

TransUnion’s report also took a granular look at online casino, among other mobile and land-based gambling disciplines, and one thing stood out.

The spread of legal iCasino in the United States has been far slower than that of online sports betting. One reason for this is fear over online casino’s potential to cannibalize its land-based counterparts, a point that’s been hotly contested. But another is the belief that iCasino has the potential to attract a riskier segment of customers than online sportsbooks — a theory that TransUnion’s survey determined to be unfounded.

According to the 3,000-adult survey, 8% of high-value (i.e., those who wager $500 a month or more), online sportsbook bettors either had low incomes with below average credit or were middle income with bad credit. For high-value online casino players, this figure was lower at 7%.

Furthermore, 58% of high-value online casino players were of high or middle income with good or excellent credit, compared to 55% of mobile sports bettors, causing the report’s authors to conclude, “There didn’t appear to be a distinctly riskier player profile emerging on the online casino channel. Even comparing the percentage of players whose incomes have decreased, we saw nearly identical shares among both channels.”

Other highlights

Some other 2023 highlights from TransUnion’s report:

• While overall participation was slightly higher across land-based channels, online channels tended to have a higher percentage of top-spending bettors.
• Most bettors are engaged in betting activity across multiple channels, and 45% of bettors placed a bet in every channel. The share who bet across all channels surged from 71% in Q3 to 83% in Q4 — a jump almost entirely due to $500+/month bettors upgrading from multichannel to all-channel bettors.
• Land-based sportsbooks had the lowest participation rate among bettors but the highest share of $500/month bettors among all land-based channels, suggesting players who bet at land-based sportsbooks have a potentially higher level of dedication to the channel.
• High-wagering online bettors were much more likely to say their finances were better than expected when compared to players who spend less than $500 per month on betting activities (75% vs. 59%).
• Millennials made up 50% of all bettors in the fourth quarter, 9% higher than their share throughout the rest of 2023. Conversely, Gen Z’s participation share fell markedly, declining from 20% to 14%.
• Fifty-three percent of online casino bettors and 63% of top-spending online casino bettors said they expected to miss a payment on at least one of their current bills. This was slightly higher than online sportsbook bettors, though both channels were much higher than the overall population.

Photo: Sina Schuldt/picture alliance via Getty Images