CLSA flags slower momentum, GGR growth forecast trimmed

Macau’s gross gaming revenue (GGR) is expected to grow more slowly in 2026 than previously forecast, according to CLSA, which has trimmed its outlook amid weaker growth drivers and near-term uncertainties.

In a sector report published Friday, analyst Jeffrey Kiang said CLSA now expects Macau GGR to rise by 4% year-on-year to MOP257.3 billion in 2026, down from an earlier estimate of MOP259.9 billion.

“Macau’s gaming revenue YoY growth is poised to decelerate due to a tougher base effect and a lack of incremental growth drivers,” Kiang wrote, adding that there is limited scope for upside surprises.

The revision comes as the sector enters a seasonally weaker second quarter following stronger-than-expected performance in the first three months of the year. CLSA expects earnings before interest, taxes, depreciation and amortization (EBITDA) to decline sequentially as revenue growth moderates.

The firm also highlighted the upcoming FIFA World Cup, running from June 11 to July 19, as a potential headwind. “The tournament will potentially divert foot traffic away from Macau, but it is difficult to quantify the impact,” the report said, noting that historical comparisons are complicated by differing market conditions and pandemic effects.

Another concern flagged is below-normal VIP win rates. CLSA’s channel checks indicate that second-quarter VIP hold has ranged between 2% and 3%, compared with a theoretical rate of about 2.85%.

Lower hold rates can pressure margins, as operators generate less revenue while maintaining player acquisition costs.

Broader economic signals

Indications from mainland China also point to softer momentum. CLSA noted that the spread between the producer price index and purchasing price index (PPI-CPI spread) – a proxy for industrial profitability – remained negative through April. This indicator has historically led Macau GGR trends by around six months.

CLSA also noted that competition within the sector is intensifying. Several concessionaires are advancing property upgrades and new developments, including Sands China’s planned room renovations at The Venetian Macao and Wynn Macau’s proposed Wynn Enclave luxury tower.

CLSA expects these projects, alongside increased non-gaming investments, to keep capital expenditure elevated through 2026 and 2027.

CLSA left its forecasts for 2027 and 2028 unchanged at MOP271.5 billion and MOP282.7 billion, respectively.