US Macroeconomy & iGaming: What to Expect in 2025

How the US Macroeconomy Could Shape the iGaming Market in 2025

By Amelia Walker Senior Content Writer Updated: 03 January 2025

Amelia Walker Senior Content Writer

Amelia Walker is a Senior Content Writer at Betting.US. She has a law degree and deep knowledge of the gambling laws in the United States. Her mission is to keep players informed about responsible gambling, while her passion for sports helps her create useful guides. Amelia has over a decade of experience in betting, which has positioned her as a trusted voice among our readers.

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Monetary Policy and Market Liquidity

The Federal Reserve has cut the federal funds rate by 0.25% to 4.5%-4.75%. While this reduction is significant, the yield curve provides clearer market expectations for growth and inflation. Investors are cautious, as optimism may already be priced in. Potential rate reversals and fiscal changes could increase volatility, especially in leveraged sectors.

Ever alert to market sentiment, private equity firms may find this environment ripe for mergers and acquisitions. With online gaming emerging as a cash-generative sector, private equity will likely zero in on opportunities to divest portfolio assets that have reached peak value or met strategic milestones.

The Role of M2 Money Supply

As the M2 money supply witnesses a $500 billion decline to $21.2 trillion, the Fed’s quantitative tightening plays a pivotal role. Yet, projected rate cuts may usher in a revival in M2 levels and introduce more liquidity.

This reduction creates a favorable environment for the iGaming sector. Reduced Treasury bond yields drive capital towards equities, potentially pushing up valuations and a conducive lending environment for startups and scale-ups.

In his analysis for iGB, Ben Robinson notes:

September’s inflation rate of 2.44% aligns closely with the Fed’s target, suggesting a stable outlook. However, increased liquidity could trigger higher inflation, prompting swift Fed action that might reverse gains in high-growth sectors like iGaming. These yo-yo policy swings could stymie investment and slow growth.

Debt Concerns

The US already faces a national debt of $35.9 trillion, while Trump’s proposed fiscal budget is set to add another $15 trillion over the next decade. The US government holds 21% of this, which is an international obligation. This percentage has decreased over the last 10 years, which indicates a change in foreign investors’ sentiment and raises concerns about the sustainability of this financial structure.

Interestingly, stablecoin issuers, such as USDT and USDC, have emerged as significant holders of US debt, surpassing even Germany.

Regulatory Dynamics and the iGaming Sector

US lawmakers realize the benefits of loosening regulatory frameworks. Such is the prospect of tax revenue, which could boost financially strained economies. On the one hand, there’s great interest in public and private company investments.

On the other hand, even in a well-regulated market, as is the American, sweepstakes and crypto gaming are becoming popular. The problem is they’re in a grey area, as most states have no specific laws prohibiting them.

However, unregulated markets present both challenges and opportunities. Private equity’s involvement in iGaming has increased, which shows the industry’s growth potential. Recent important transactions, such as Apollo’s acquisition of IGT & Everi, clearly confirm this theory.