The Zacks Gaming industry benefits from macroeconomic tailwinds, particularly the Federal Reserve's interest rate reduction and strong demand for sports betting. The industry is experiencing an upside, thanks to increased visitation and spending per visit, especially from younger demographics. Stocks like Flutter Entertainment plc (NYSE: FLUT), DoubleDown Interactive Co., Ltd. (NASDAQ: DDI) and GDEV Inc. (NASDAQ: GDEV) will likely gain traction from this upbeat demand.
Industry Description
The Zacks Gaming industry includes companies that own and operate integrated casinos, hotels and entertainment resorts. Some industry players also deliver technology products and services across lotteries, electronic gaming machines, sports betting and interactive gaming. Some firms develop and operate gaming establishments and associated lodging, restaurants, horse racing and entertainment amenities. Many companies are involved in developing and selling gaming applications. E-sports or sporting events or tournament services, content management systems, video software, mobile applications and e-sports data platform solutions are provided as well.
Key Themes Shaping the Gaming Industry
Interest Rate Cut to Aid Gaming Industry: In its latest policy meeting, the Federal Reserve reduced interest rates by 50 basis points to stimulate the economy and support the labor market. The Fed has kept the key interest rates at 4.75-5% and eased its monetary policy for the first time in four years. According to the Fed's Summary of Economic Projections, officials anticipate another half-point rate cut later this year, with additional cuts expected in 2025 and 2026. Most gaming companies rely on debt to finance their operations, expansion projects and renovations. A reduction in interest rates lowers the cost of borrowing, allowing gaming companies to take on new loans or refinance existing debt at more favorable terms. This can free up capital for growth initiatives and reduce interest expenses.
Macau Gaming Revenues Improving: The industry benefits from improving visitation. In September, Macau's gross gaming revenues rallied 15.5% year over year. Robust investment will continue to aid the gaming industry in Macau. Casino operators are adopting ...
