Housing starts are considered an indicator of the health of the economy. Previous housing start declines coincided with the 1973–1974 and 1979–1982 recessions, the 1987 stock market meltdown and the 2007–2009 housing-induced great recession. Recent trends are not encouraging. Despite a national housing shortage, housing starts have trended downward as interest rates have remained elevated, especially in southern states (where inventories are admittedly high). Just one data point among many, but maybe a sign that it might be time to lower interest rates?

Movie Industry vs. Casino Industry Comparison – Part 2

A few weeks ago we evaluated the plight of the movie industry and its recent decline compared to bricks and mortar casinos and retail. Let’s dive a little deeper.

The domestic box office grew considerably from the late 1970s through 2019, topping out at $11.9 billion in 2018. Further, box office growth was closely correlated to the number of movie releases each year.

The COVID pandemic hit the movie industry like a sledgehammer: the number of yearly new releases declined and has not recovered. New releases are down 32% from their 2018 peak, and box office revenues declined by 28% during the same period.

U.S. Dollar on Downward Trek – What Does This Mean for the Gaming Industry?

When measured against other major currencies, the U.S. dollar has declined almost 7% since the new administration took the reins of the economy. Although many reasons for this shift have been postulated, perhaps the most plausible is a reallocation of reserves away from treasuries as U.S. economic policy has become less predictable and the rule of law less certain. Additionally, ballooning U.S. debt and deficits and poor governance may be making investors skittish.

Convergence of Sports, Entertainment and Gambling

In recent months, much speculation has been made about the convergence of sports, entertainment and gambling, and a good example of the power of this convergence can be seen in the British football club, Wrexham AFC.

In November 2020, movie and TV stars Ryan Reynolds and Rob McElhenny (entertainment) took over the Wrexham Football Club in Wales (sports), and within around a year and a half, launched a streaming series Welcome to Wrexham(entertainment). Now in its fifth season, the series has posted 50 episodes and is currently the 86th most popular streaming show according to televisionstats.com.

This merging of sports and entertainment has had a significant impact on related sports betting (gambling). Notably, the betting company Entain reported in 2023 that wagering activity on Wrexham games increased 781% in Australia and 3818% in the US, mind-boggling numbers. 

A high-level look at the U.S. and Europe’s gambling markets is revealing. Both regions spend almost the same amount on gambling as a percentage of GDP  – 0.40% in the U.S. and 0.39% in the EU  – but that’s where the similarities end.

Restaurant demand has strengthened considerably after a choppy 2024. Monthly seated diners across major U.S. cities has increased by over 5% in every month since November of 2024.

Of course, there are winners and losers: Brooklyn, Houston, Tampa, San Francisco, San Diego, Minneapolis and Dallas have all seen significant increases while Kansas City, Pittsburgh, Las Vegas, and New Orleans have all slumped. Although it might seem strange to see popular tourism destinations like Las Vegas and New Orleans lumped in with Kansas City and Pittsburgh, these trends do comport with weakness in the Las Vegas Strip gaming market and regional markets in Missouri, Kansas and Pennsylvania.

The good news is that people still like eating out and apparently can still afford to. A cautionary note, that spending might be close to home.

This week we look at the relationship between live sports attendance and sportscast viewership. In doing so we highlight the power of the NFL brand relative to all other sports but also explore the growing clout of the Premier League brand relative to other US sports leagues. This is of particular interest with the FIFA World Cup headed to North America next year.

An economic thought experiment?
In the U.S., consumer spending is responsible for 67% of economic output, investment 18%, government spending 17% and we have a trade deficit of 3%. This has not always been the case.

Recession on the horizon?

We live in a risk-on environment with lots of indicators pointing to a near-term recession. What does this mean for regional casinos?

Unfortunately, the data surrounding the last recession is limited and significantly variable. Through our research, we identified 25 casinos that were operating in reasonably stable competitive conditions and which had no significant expansion during the Great Recession in 2008-2010:

• The mean decline in revenues from 2007-2010 was 4.8% but the median decline was only 2.1%.

• Variability was significant. The range of results included a worst case 22.6% decline, but a best case increase of 17.2%.

• 17 of the 25 casinos experienced declines in revenues over the three-year period ranging from 0.6% to 22.6%.

• 8 of the 25 experienced increases in revenues ranging from 3.9% to 17.2%.

• 68% of the casinos experienced declines.

It’s all about the experience.

Lots of folks these days are talking about the growth of online gaming and the demise of brick and mortar casinos. But hold your horses.

A comparison of the retail and movie industries might be instructive. While online retail revenues have grown to a $1.4 trillion industry, brick and mortar retail continues to chug along, managing to grow every year (except 2020) despite the spectacular growth of online channels. That is likely because successful retailers have innovated, created omni-channel distribution and provided reasons to come into the store.

Tourism from western Europe plummeted  in March of 2025. Travelers from Asia, Oceania and Africa also declined. Eastern Europe had a small increase and the Middle East saw a significant increase. The large decline in Western Europe could reflect the current level of uncertainty around trade policy and changes in the relationships between the US and its allies. Overall, travel from these overseas regions declined by over 208,000 or 10.2%.

The biggest decliners were Germany, the UK and Spain with declines of 54,580 (28.2%), 47.673 (14.33%), and 20,687 (24.6%) respectively. The average percentage decline among these top 20 decliners was 19.3%.

One month is not a trend but if these declines persist, this could spell trouble for the tourism and gaming industry in several U.S. destinations.

The Smoot Hawley era trade wars and their aftermath look similar to present day. After the enactment of the Smoot Hawley tariff regime, GDP and consumption both declined by a cumulative 35% over a two-year period and the Dow Jones industrial average decline from a peak of over $380 in mid-1929 to a trough of $41 in mid-1932. It took the stock market 29 years to recover, and GDP and personal consumption did not recover fully until the U.S. entry into World War II in 1941.