Macau Gaming Growth Slows as CLSA Cuts Forecasts

Macau gaming enters ‘slow lane’ as growth drivers fade, CLSA says

Macau’s gaming industry is likely to enter a slower phase of growth in 2026, according to brokerage CLSA, which has trimmed its forecast for gross gaming revenue (GGR) and warned that a softer second quarter, weaker VIP win rates and potential World Cup-related disruption could weigh on near-term performance.

In a sector report published on 5 June, CLSA cut its 2026 Macau GGR forecast by 1 per cent to MOP257.3 billion (US$31.9 billion), implying annual growth of 4 per cent. The brokerage maintained its forecasts for 2027 and 2028 at MOP271.5 billion (US$33.6 billion) and MOP282.7 billion (US$35.0 billion), respectively.

“Macau’s gaming revenue YoY growth is poised to decelerate on tougher base and lack of incremental growth,” analyst Jeffrey Kiang wrote. “We do not see much room for surprises either.”

Softer second quarter expected

CLSA said the sector is entering a seasonally weaker second quarter following stronger-than-expected earnings in the first three months of the year.

The brokerage expects EBITDA across the sector to decline sequentially in the current quarter as gaming revenue growth moderates. It also pointed to the FIFA World Cup, which runs from 11 June to 19 July, as a potential headwind.

“FIFA World Cup, spanning 39 days from 11th June to 19th July, will potentially divert foot traffic away from Macau, but it is difficult to quantify such impact,” the report said.

CLSA noted that the effect of previous World Cups may have been obscured by stronger underlying market growth in earlier years and by pandemic-related restrictions during the 2022 tournament.

VIP win rates remain below normal

Another concern identified by the brokerage is weaker-than-normal VIP hold.

According to CLSA channel checks, Macau’s overall VIP win rate in the second quarter has ranged between 2.0 per cent and 3.0 per cent, compared with a theoretical win rate of around 2.85 per cent. The brokerage said lower hold rates are margin-dilutive because operators generate less gaming revenue while continuing to incur costs associated with attracting players.

The report also pointed to broader economic indicators in mainland China. CLSA said the spread between China’s producer price index and purchasing price index, which it uses as a proxy for industrial profitability, remained negative through April. Historically, the indicator has led Macau GGR growth trends by roughly six months.

“Coupled with the negative spread is a depressed VIP win rate across the gaming sector in most of April and May 2026,” Kiang wrote.

Growth comes at a cost

CLSA also expects competition among concessionaires to intensify as operators increase capital expenditure on hotel upgrades and expansion projects. The brokerage forecasts aggregate industry capex to rise from US$2.06 billion in 2025 to about US$3.8 billion in both 2026 and 2027, putting pressure on free cash flow despite continued earnings growth.

The brokerage lowered target prices across the sector. CLSA said Macau gaming remains on a growth trajectory, but one with fewer catalysts and less room for positive surprises than earlier in the recovery cycle.