Is the gambling industry recession proof?

It's a question I have seen pop up on several forums and to be honest I don't know the answer. During the last recession I didn't have much focus on gambling companies, but one thing for sure is that a recession is generally not good for consumer spending. Whether punters turn to gambling when the chips are down isn't certain, but there will certainly be less disposable income around. I can see how irrational gamblers are though, through the markets; but I'm not sure if this will extend into the market when a recession bites.

The Irish economy is in trouble at the moment and slightly ahead of the UK's curve. It was recently reported that on-course bookmakers in Ireland have seen a 14 percent drop in turnover in the first six months of 2008, compared with the same period in 2007. These figures were in a report from the Irish Examiner. It mentioned that Bookmakers took in 82.7 million euros in H1 2007. So far in 2008, figures are at down to 69.4 million euros. The Tote's revenue has also declined 279 thousand euros, in total turnover for the period to 25.7 million euros.

The director of racing for Horse Racing Ireland told the newspaper that the figures weren't shocking given the state of the economy. 'It been an ongoing trend for a while given the slowdown in the economy and the half-year figures reflected that situation.' Mr. Morris said the decline may also be related to bettors' trend toward Internet betting.

Without online figures its difficult to estimate the true impact. You would guess that the continued migration to online betting is still growing, so you can discount some of the decline to that. But one thing for sure is that the economic slowdown in Ireland does not appear to be benefiting the Tote or on course market.