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 US 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,” the head of TransUnion’s gaming business, Declan Raines, said. “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|
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|
“Bettors’ risk of fraud has implications for operators as well,” Raines said. “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 US Gaming Report.
This online survey of 3,000 adults was conducted April 25 to 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 to 2005; Millennials, born 1980 to 1994; Gen X, born 1965 to 1979, and Baby Boomers; born 1944 to 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.