Macau’s casino industry is expected to post a slower growth trajectory in the second half of 2026 and in the coming years, amid tougher comparison bases, “limited room for surprises” regarding upward demand, and rising capital expenditure, all weighing on earnings and free cash flow, suggested a new report from brokerage CLSA.
In a note titled “Back to the Slow Lane”, analyst Jeffrey Kiang said Macau’s gross gaming revenue (GGR) growth was likely to moderate, prompting the brokerage to trim its 2026 market forecast by 1 percent.
CLSA now expects Macau GGR to reach MOP257.3 billion (circa US$31.9 billion) in 2026, representing year-on-year growth of 4 percent. The brokerage maintained its forecasts for 2027 and 2028, projecting GGR growth of 5.5 percent and 4.1 percent respectively.
The institution said there was “limited room for positive surprises” in Macau’s gaming demand outlook, despite continued resilience in visitation and spending.
Following “better-than-expected” market-wide earnings before interest, taxation, depreciation, and amortisation (EBITDA) in the first quarter of 2026, “a seasonal slowdown of GGR in the second quarter means sector EBITDA could sequentially decline, while headline year-on-year growth shall moderate from the current [quarter] onwards,” Mr Kiang stated.
The brokerage also highlighted the FIFA World Cup, which runs from June 11 to July 19, as a potential factor diverting some consumer spending and travel away from Macau, though it noted the impact would be difficult to quantify.
Another concern observed by the brokerage was weaker-than-normal VIP hold rates. CLSA’s channel checks indicated overall VIP win rates had ranged between 2.0 percent and 3.0 percent during the current quarter-to-date period, compared with a theoretical rate of 2.85 percent.
The brokerage also said competition in Macau was intensifying as operators embarked on new investment projects.
Sands China Ltd has increased capital expenditure guidance to support room refurbishments at The Venetian Macao, while Wynn Macau Ltd plans to develop a new hotel tower at the Wynn Palace casino complex.
Melco Resorts & Entertainment Ltd is also progressing with the rebranding of Countdown Hotel into REM, while Galaxy Entertainment Group Ltd moves forward with Phase 4 of its flagship Galaxy Macau property.
CLSA estimates aggregate sector capital expenditure (capex) will rise sharply from approximately US$2.06 billion in 2025 to US$3.79 billion this year and US$3.66 billion in 2027, before declining to US$2.76 billion in 2028.
As a result, the brokerage forecasts industry free cash flow will fall from US$3.75 billion in 2025 to US$2.71 billion in 2026, followed by a “modest growth” to US$2.97 billion in 2027. A stronger rebound is only expected in 2028, when free cash flow could reach US$4.20 billion as major development projects near completion, it added.
