The European gaming industry will see modest growth in gaming turnover, or wagers, supported by stable economic conditions in the euro area, says Moody's Investors Service. The rating agency's outlook on the industry is stable.
"Companies with greater online gaming exposure are likely to experience higher growth next year, though most rated companies remain highly exposed to mature segments of the gaming industry, which we expect to remain broadly flat," said Donatella Maso, a Moody's Vice President - Senior Analyst.
Furthermore, Moody's expects a rise in disposable income in 2016, albeit at a slower pace than 2015 in some European countries, which should drive gaming activity, according to "Gaming -- Europe: 2016 Outlook -- Modest Wagers Growth Supports Stable Outlook Despite Ongoing Cost Pressure."
The UK, Germany and Spain all benefit from a stable economic environment, while Italy's economic recovery remains slow, dragging on its gaming industry performance.
"We note that regulation and taxation will continue to pressure revenues, profits and profit margins in 2016, but the impact will be less pronounced than in 2015," added Maso. "We do not expect any new major regulatory changes next year, except in Italy where provisions of the draft 2016 Stability Law propose taxation increases that would affect revenues and profits."
Furthermore, Moody's anticipates continued cost optimisation efforts and M&A activity as companies seek to offset increasing compliance costs and taxes.
