The ascension in the demand for weight-loss drugs, notably Novo Nordisk’s Ozempic and Wegovy, is significantly impacting several industries. Among these, the casino gaming industry appears to be vulnerable to this unfolding trend of increased pharmaceutical intervention in weight management.
Weight-loss medications, known as GLP-1 agonists, are being more frequently requested from doctors by individuals endeavouring to lose weight. This development bears implications for various sectors of Corporate America. In a report shared with clients, Bank of America analysts observed a correlation between obesity and problematic gambling behaviour – a revelation that underscores the significant ramification this change could have on the gaming industry.
Based on current research, analysts estimate that between 10% and 30% of the revenue in the casino industry is generated by customers exhibiting problematic betting habits. With obesity prevalent among this group, the uptake of weight-loss drugs could potentially create a predicament for the gaming industry. Further, they estimate that the widespread use of GLP-1 agonists could result in a 0-4% downturn in US commercial gaming revenue, with slot machines and regional gaming being at higher risk.
Novo Nordisk’s Ozempic and Wegovy, along with Eli Lilly’s Mounjaro, are gaining ground among weight-loss prescriptions favoured by doctors and patients. Nevertheless, weight-loss drug consumption poses challenges, not just for gaming companies such as casino operators and slot machine manufacturers, but for traditional food and beverage producers and retailers as well. Analysts warn that companies like Walmart may be vulnerable, given consumers might reduce food consumption and opt for healthier options after starting on Ozempic or similar medication.
Fast-food chains, including McDonald’s and Taco Bell, are also susceptible to a downturn as individuals on weight-loss medication could start eschewing fatty foods. In contrast, athletic apparel brands such as Deckers and Lululemon stand to gain, owing to the projected increase in exercise and healthier living, with savings achieved from reduced food consumption possibly channeled towards a fitter lifestyle.
Notably, the market for weight-loss medications still displays ample growth potential, with revenue in this segment projected by Morgan Stanley to hit $77 billion by 2030. This surge is being driven by the abundant social media documentation of significant weight loss journeys, and also, the quicker than predicted availability of affordable insurance coverage for obesity medications.
Boyd Gaming, Caesars Entertainment, MGM Resorts International, Penn Entertainment and Red Rock Resorts are being closely watched by Bank of America’s analysts for any potential negative impact from the expanding use of weight-loss drugs. MGM and Caesars, as the two largest operators in Las Vegas, might benefit from this trend as weight loss could encourage more people to travel. On the other hand, regional operators could face a pinch as a healthier living trend takes hold.
As we pivot this discussion of physical casinos and potential impacts of the weight-loss drug trend, it’s worth noting that the realm of gambling and entertainment extends beyond the walls of land-based casinos. It prompts us to consider another gene of casino gaming that’s been taking Canada by storm – online casinos. We, at West Island Blog, have compiled a list of the top online casinos this month. With no geographical constraints, this digital evolution offers a unique blend of convenience and a wide array of gaming options right at your fingertips, fundamentally changing the way we understand and engage in gambling today.
