Brokerage firm CLSA has reevaluated and subsequently reduced its projections for the gross gaming revenue (GGR) of Macau's casinos for the years 2027 and 2028. According to the firm, this adjustment reflects a "more cautious" outlook on the sector's trajectory, prompted by an absence of "supportive" macroeconomic signals.
Previously, CLSA anticipated higher figures but has now adjusted its expectations downward. The 2027 estimate has been cut by 4 percent, setting the new target at MOP259.2 billion (approximately US$32.1 billion). Similarly, the 2028 forecast has been reduced by 3 percent to MOP270.4 billion.
Despite signs of a "notable recovery" in visitor numbers and overall GGR in the aftermath of the FIFA World Cup 2026 – hosted from June 11 to July 19 – CLSA expressed that these improvements were not strong enough to offset broader macroeconomic challenges.
The brokerage is skeptical about sustained growth under the current economic conditions, even though earlier cyclical factors such as a low base effect and potential corrections in VIP win rates initially suggested more promising trends.
Macroeconomic Influences and Growth Concerns
The firm's latest analysis indicates an expectation of GGR growth by only 2.4 percent year-on-year to MOP259.2 billion in 2027, with a modest increase of 4.3 percent to MOP270.4 billion projected for 2028. CLSA's projections consider the average daily GGR run-rate for Macau to be around MOP710 million in 2027, rising slightly to MOP739 million in 2028.
A primary factor contributing to the tempered expectations includes China's unimpressive gross industrial profit indicator, a significant barometer for Macau's gaming revenue because of its correlation to broader economic health. Even with the Chinese renminbi anticipated to appreciate by 2 percent against the U.S. dollar in 2027, which could potentially hike inbound visitor volume to Macau, these are seen as insufficient to counter the negative economic indicators.
CLSA's analysis notes a correlation between China's producer and purchasing price indices spread and Macau's year-on-year casino GGR change, typically predicting GGR trends about six months in advance. The analyst, Jeffrey Kiang, emphasized that the current negative spread of -3.31 percentage points, primarily due to heightened oil prices, suggests enduring macroeconomic headwinds for Macau, projecting minimal positive change in the sector.
Operational Pressures and Financial Metrics
Alongside macroeconomic challenges, CLSA projects that operating expenses for Macau's gaming companies could grow faster than their revenue, consequently squeezing profit margins. Indeed, the gaming sector’s results in the second quarter of 2026 underscore these pressures, with reported EBITDA dropping by 10.7 percent year-on-year to roughly US$1.81 billion.
Furthermore, operating costs for properties increased by 2 percent year-on-year during the same period, despite the sector witnessing a slight decline in GGR.
An increase in employee costs, with consistent annual wage hikes for non-managerial staff projected to remain at or above 2.5 percent through 2026, adds further strain. CLSA indicates that these factors breed skepticism about any near-term improvement in EBITDA margins with only muted GGR growth anticipated.
As a result, the firm remains prudent, reinforcing its cautious stance on Macau's gaming industry outlook for the coming years.
Source: CLSA trims 2027 and 2028 Macau GGR growth forecasts, voicing caution on sector’s outlook, GGRAsia, September 15, 2026.
Posted by Wizard
Sep 15 2026
Sep 15 2026
Comments
No comments for this article.