Jamaica’s gaming industry saw only marginal growth in the first quarter of FY2024/25, with total sales increasing by just 2.39 per cent year-over-year. However, industry experts warn that this momentum may wane in the coming quarters, as Hurricane Beryl’s economic aftermath and rising costs could weigh on consumer spending and hinder further growth.

With inflation driving up the cost of essentials and hurricane recovery requiring greater household spending, discretionary activities like gaming may see decreased patronage, according to Vitus Evans, executive director of the Betting, Gaming and Lotteries Commission (BGLC).

“The upward trend is expected to continue in the next quarter; however, the impact of Hurricane Beryl and general economic conditions may impact the trend for the last two quarters,” Evans stated in response to queries from the Jamaica Observer.

The BGLC’s first-quarter results for FY2024/25 provide the first comprehensive look at the betting and gaming sector’s performance since Hurricane Beryl’s impact. Growth during the period was driven primarily by the strong performance of gaming lounges in high-traffic areas like St Andrew and St James.

Evans attributed this growth to the success of gaming lounges, noting that “performance in gaming lounges is driven by the types of slot machines and multi-station gaming machines, game themes, and payout rates that average 96 to 98 per cent.”

While the overall gaming sector posted modest growth, the betting segment saw a substantial decline, with government revenue from betting down 30.18 per cent. The local horseracing sector contributed to this contraction, with a 15.88 per cent drop in sales due to reduced race days and a limited number of horses available for racing. In contrast, simulcast racing, offering international race betting, reported a significant 75.98 per cent increase in sales, as bettors favoured more frequent and varied options.

The gaming industry’s immediate focus remains on weathering potential economic impacts while assessing the ongoing effects of Hurricane Beryl. Evans suggested that a challenging economic environment may limit some consumers’ ability to engage in leisure activities, while others may shift toward more flexible, digital gaming options that require less discretionary spending.

In response, the BGLC is focused on adopting a versatile approach to mitigate these risks.

“Empirical evidence shows that when an economy is doing well, gambling revenues decline. A significant revenue drop could pressure the Government to increase taxes in other sectors, which could have a ripple effect on the economy,” Evans remarked.

To address the revenue shortfall, Evans told the Business Observer that the regulator is exploring several strategies. He noted that discussions are underway to enhance regulation in the online gaming sector, a move expected to broaden the audience base and generate additional income. Additionally, incentivising local gaming operations may encourage expansion and investment.

“Launching public awareness campaigns may also increase public awareness of the benefits of legal gaming,” he added.

Evans emphasised that the BGLC is closely monitoring developments in online gaming as well as casino gaming, which has gained traction among younger, tech-savvy consumers. He suggested that the industry’s long-term resilience will likely depend on continued innovation and targeted offerings that align with evolving consumer preferences.

“The market will grow in the online gaming space, including social media offering options to the gaming population within younger age groups,” he said.