Will Online Gambling Feel The Sting of Inflation?

Will Rising US Inflation Affect Online Gamblers
Will Rising US Inflation Affect Online Gamblers

US Inflation is rising to the highest it’s been in the past 40 years, and people are beginning to feel it. In December, the last Bureau of Labor Statistics report showed inflation went up to 6.8% last year, a rate the US hasn’t seen since the 1980s. It has businesses and policymakers scrambling and consumers retooling their budgets.

How does inflation affect the online gambling business? And, what does inflation mean to the average online player?

The Ripple Effect of Inflation Hits Everyone

Poker Chip Stacks with Percentage Symbol

Simply put, inflation is when prices rise, and we have to pay more for basics. There are several reasons for these price hikes. Right now, the COVID pandemic and the resulting supply-demand fluctuations are the primary issues. With a lot of money circulating and a higher demand for goods, the value of your dollar has gone down.

The US Federal Reserve has a few tools to help correct that. They can raise interest rates or cut back on the amount of cash in the economy.

Inflation affects all sectors, from energy to housing to transportation and household needs. When there is a spike, everyone feels the pain, including the gambling industry, which counts on customers with disposable income.

Can It Stifle the Historical Growth of the Gambling Industry?

Gambling has historically grown according to its legalization rather than economic impact. In recent years, the industry has done better, soaring to new heights in profits. Industry observers are confident in continued growth.

One expert on the news site QCostaRica wrote:

The inflation forced casinos to adjust their minimum bets and control expenses. However, the industry didn’t suffer because of this trend. The reports indicate that online gambling is among the markets that show constant growth. The inflation, lower purchasing power, and even the pandemic didn’t affect this industry. It was worth $64.13 billion in 2020, and the growth trend will continue in the coming years. If everything goes right, the industry value will almost double. The predictions are it will be worth $112 billion in 2025.

Q Costa Rica

However, the gambling landscape has changed drastically with the internet age, and no one in the industry now has faced an inflation rate as high as today.

How Sustained Inflation Could Affect Online Gamblers

Continued high inflation could alter those optimistic projections, and it is hard to tell what online gamblers will face if inflation numbers remain high. There are some possibilities:

Minimum Bet Increases Poker Chips in Hand

Rise of Minimum Bets

Anyone who has been around casino gambling for a while knows that it is harder to find a penny spin or $1 table these days. That’s because inflation has always been with us to some degree, and casinos are like any other business when trying to compensate. 

But a higher inflation rate over a long period may cause these minimum bets to rise even more. 

Taxes and Regulations Rising Chart with Red Arrow

New Taxes and Regulations

Federal, state, and local governments have to offset the high costs that inflation brings, too. Typically sin taxes, like tobacco, alcohol, or gambling, feel the pain first. So, they could easily look to the casino industry for that extra money.

With continued high inflation, the regulations that govern the industry may cause casino licensing fees and taxes to rise.

Increasing Operation Costs Money With Red Arrows and Percentages

Operation Costs Get Passed Down to Users

Like any other business, casinos may look for ways to recover extra costs from the demands of high inflation. In addition to the additional fees the government may charge, game developers may charge more, and casino employees will want more pay.

That means that customers might have to chip in, and casinos could charge them a little more. They would do it subtly because they don’t want to lose your business altogether.

You may see bet limits rise, deposit and withdrawal fees inch up, and new bonuses with more demanding rollover requirements. Popular slots RTPs might be re-gauged, and odds on table games may even change slightly.

Signs Gamblers Could Take a Hit

Whether or not we’ll see casinos soften the blows of inflation by charging players more depends on how long the higher inflation rates last.

There are signs that things could get worse before they get better. When you see these things going on, you will know that the cost of gambling is closer to going up.

  • The Federal Reserve continues to taper the practices that have infused the economy with cash.
  • Federal interest rates rise.
  • The Consumer Price Index goes up, and gas, food, and other necessities cost more.
  • Workers strike or change jobs to get more pay.

However, the most optimistic experts believe that the recent spike is backlash from COVID and the supply chain problems the pandemic has caused. They think we’ll pop out of the inflationary spiral when fewer people are sick. Let’s keep our fingers crossed that everything levels out sooner than later.

Author: info

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