Analysts warn gaming sector faces mounting pressure from costs, hotel shortage, and shifting player demographics

[Photo: Ricaela Diputado]

Gaming analysts at the 2026 Global Gaming Expo Asia (G2E Asia) warned that while top-line demand across the Asian gaming landscape shows signs of stabilization, the casino sector in Macau is grappling with a “perfect storm” of structural hurdles, ranging from hotel room shortages to a fundamental shift in how mainland Chinese visitors gamble.

A central theme of the discussion was the rise of new baccarat side bets in Macau – including ‘Pairs+’, ‘Monkey no Monkey’, and ‘4/5/6 Cards’ – which were recently greenlit by the Gaming Inspection and Coordination Bureau (DICJ). While these products have successfully injected fresh revenue into the mass-market floor, they also carry concerns regarding player longevity.

Vitaly Umansky, senior research analyst at Seaport Research Partners, noted that these high-volatility options have successfully tapped into a new segment of baccarat players.

“What side bets have allowed in Macau is they’ve allowed a baccarat player or a new background player to come in who is more focused on high-volatility outcomes, meaning smaller bet sizes, larger potential wins, although actual wins are going to be lower because the casino edge is higher,” Umansky explained. He noted this allows a “type of player” who was never previously attracted to the game to participate.

“Now they can be attracted to baccarat,” Umansky stated, while clarifying that this is viewed more as an evolving trend rather than a sudden shift. “Side bets in Macau aren’t brand new. They’ve been around for a while,” he said.

According to the Seaport analyst, side bets currently account for approximately 25% to 33% of Macau’s total table gaming revenue.

He noted that this figure is substantial but remains notably lower than the 45% revenue contribution seen at Singapore’s Marina Bay Sands, suggesting that further growth is possible as the market matures.

However, Umansky also cautioned that this “vertical growth” might be a zero-sum game.

“Somebody comes in with a $50,000 bankroll; they will lose quicker if they’re doing more side-betting,” the analyst explained, adding, “their length of play will potentially get reduced.”

This phenomenon, described by panelists as “burning out” the customer base, represents a critical strategic risk. While revenue per visitor may spike in the short term, the reduction in engagement time could hurt the long-term sustainability of a market that relies on repeat visitation and time spent playing.

Mass market under strain

The panel agreed that its recovery is increasingly sensitive to the cooling economy in mainland China.

On the rebound of the overnight mass business, Umansky emphasized that this “is entirely driven by economic conditions,” which currently remain fragile.

“Even if we were to get more overnight visitors, I’m not sure where these people are staying,” Umansky remarked, noting that upcoming projects like Galaxy’s Phase 4 may not provide immediate relief.

Umansky also noted that casinos are now providing incentives to customers that “six years ago would have never happened,” effectively cannibalizing higher-margin business just to maintain floor volume.

“The issue is really around wallet size and how big does a player need to be for him to move the needle if you can’t have the volumes of people […] Macau is running at 90% occupancy in their hotels. On weekends, some properties are fully sold out.”

The hotel room bottleneck

George Choi, Citi’s global head of gaming research, pointed out that the squeeze is exacerbated by operators’ tendencies to convert standard rooms into massive suites for high-rollers. While this caters to the “Premium Mass” segment, it starves the broader “Base Mass” of affordable accommodations, the Citi analyst highlighted.

The panel also debated the potential of Hengqin to serve as a “dormitory” for Macau.

While the idea of shuttling visitors across the border to utilize Hengqin’s hotel stock was raised during a question-and-answer session, Umansky expressed skepticism, outlining that without unique attractions – such as a major theme park or a 50,000-seat arena – visitors have little incentive to choose a “split-stay” model, particularly given the visa hurdles and travel friction involved.

“If all we’re talking about is building 40,000 three-star hotel rooms that are going to charge you 600 RMB a night, I’m not sure that customer coming into Macau is actually found in that.”

Digital shifts and new frontiers

Both analysts identified the United Arab Emirates and Osaka as the next significant physical frontiers for integrated resorts. However, Umansky indicated that the true disruptor may not be a building, but a platform.

Vitaly Umansky and George Choi [Photo: Nadia Shaw]

Umansky predicted that the “real big boom” in Asian gambling will eventually come from regulated online gaming. “Online sports betting has proliferated out of Europe, where it’s just a mature industry now, into the United States – where it continues to boom. […] We have it (online sports betting) in Australia. We have it in the Philippines in a fragmented way,” he said.

“The problem in Asia is that the online gaming industry is enormous, but a bulk of it – almost all of it – is illegal […] and being untaxed,” he said, suggesting that a digital shift is inevitable in the space.