ST. PETERSBURG, Fla.–With consumer indexes showing mixed optimism during February, actual consumer spending was steady during the month, according to the March 2024 edition of the PSCU Payments Index.
In addition, the Index also takes a “deep dive” into gambling, as February also saw “record-breaking” betting around the Super Bowl.
PSCU also cited new Goldman Sachs estimates that the growing U.S. sports betting market, which currently drives $10 billion in spend annually, could reach $45 billion at maturity.
“Overall spending remained steady throughout February, despite a slight dip in consumer sentiment,” said Karen Postma, SVP-risk solutions with PSCU/Co-op Solutions. “In this month’s Deep Dive, we revisit online gambling transactions within the Entertainment sector. As even more states have legalized online gambling over the past few years, sports betting activity has become more mainstream through merchants such as FanDuel, DraftKings and BetMGM. While online gambling was once viewed negatively, it now represents a growth segment opportunity, particularly among younger demographics. This growth presents an opportunity to keep internal staff informed about this evolving transaction trend, as well as provide members with financial wellness education.”
Key Takeaways
According to the company, key takeaways of the latest Payments Index include:
- Including Feb. 29 (“leap day”), debit purchase growth was 7.1% for February, continuing to outpace growth in credit purchases, which were up 3.6%. For transactions, debit grew 6.8% and credit grew 5.5% year over year.
- On a normalized basis (omitting leap day) debit purchases were up 2.7% and credit purchases were down 0.4%. Debit transactions were up 2.8% and credit transactions were up 1.6%. “This normalized view provides cleaner insight into consumer behavior, which is generally steady from the previous month,” PSCU/Co-op Solutions said, adding that all comparisons in this edition are based on normalized February 2024 results, unless specifically noted.
Shelter, Gas & Gambling
PSCU/Co-op Solutions noted the Consumer Price Index (CPI-U) increased 0.4% in February, while the 12-month rate of inflation was 3.2%. Shelter and gasoline contributed 60% of the increase.
Gambling, fueled by further expansion of government-licensed Internet gambling to a total of 38 states, posted strong results in February, the analysis added, noting debit purchases were up 39%, while credit purchases were up 11%.
The top three merchants (FanDuel, DraftKings and BetMGM) represented over 70% share of purchases in this single category that peaked in February, with Super Bowl LVIII occurring in Las Vegas, PSCU/Co-op Solutions said.
The full report is available here.
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