Macau Casino Growth to Lead in 2026 While Profit Margins Remain Tight

(AsiaGameHub) –   Morgan Stanley forecasts that Macau’s casino sector will outperform other leading gaming hubs in terms of casino revenue growth in 2026, though the firm also notes that improving profit margins will remain an uphill battle.

Per Morgan Stanley’s estimates, Macau’s gross gaming revenue will rise roughly 6 percent year-on-year, a figure that stands in sharp contrast to other gaming destinations such as Las Vegas and Singapore, where growth is projected to hover around 1 percent.

This outlook follows another strong performance year for Macau’s gaming industry, which recorded a GGR of MOP247.40 billion, marking a 9.1% year-over-year increase. However, this growth has yet to fully translate to improved bottom lines. EBITDA is only expected to climb around 2 percent in 2026, a figure that is not just underwhelming but also represents a decline from the previous year’s level.

Citing ongoing competition for mid-tier players and persistently high promotional spending, the bank stated:

We hold the view that cost pressure, especially around reinvestment, is structural in nature due to the sector’s focus on the premium mass market segment.

Morgan Stanley also indicated that lower earnings may be on the horizon. The firm explained that if margin pressure intensifies, it could lead to underperformance across the entire sector. Multiple factors could drive this potential weaker operational performance, including slower economic growth in the second half of 2026 caused by base effects, softer demand from the Chinese mass market, rising promotional allowances, and non-gaming expenses that remain elevated.

Given these concerns, the bank has downgraded its forecast for Macau’s gaming sector from outperform to in-line. It also expects GGR growth to slow starting in May, with the second and third quarters potentially posting an EBITDA decline. Singapore’s gaming industry, which is highly concentrated between its two integrated resorts, Marina Bay Sands and Resorts World Sentosa, is still projected to record mid-single-digit growth in gaming volumes. However, this growth could be offset by the normalization of hold rates after a strong 2025 performance.

The bank cautioned:

Following unusually high hold rates at Marina Bay Sands in 2025, the normalization of these rates will likely offset volume growth, leading to flat industry GGR and an approximate 1 percent year-on-year decline in Singapore’s EBITDA for 2026.

Overall, while Macau is on track to lead global gaming hubs in revenue growth, its core challenge in 2026 will be navigating rising costs and tighter profit margins in an increasingly competitive market.