China’s weaker economic conditions and tax enforcement on offshore trusts may be weighing on Macau gaming demand, according to Seaport Research, which forecasts a 5 percent year-on-year decline in October gross gaming revenue (GGR).
In an October 1st report, senior analyst Vitaly Umansky linked the softer demand to pressures affecting wealthy Chinese customers with assets overseas.
‘Softer demand is likely being caused by weaker China macroeconomic conditions and China government tax enforcement on offshore trusts impacting HNWI’s with overseas assets,’ he wrote, referring to high-net-worth individuals.
China’s July 24th rules clarified taxation of offshore trusts, which wealthy families use to hold and manage assets overseas. They apply a 20 percent tax to gains when assets are transferred into such trusts and to taxable income generated during their operation. Certain historical unpaid taxes must also be settled, adding potential cash demands on affected individuals. Reuters reported that some wealthy investors were considering asset sales or borrowing to meet their tax bills.
The assessment followed Macau’s September GGR of MOP18.06 billion ($2.23 billion), down 1.2 percent year-on-year and 17.5 percent from August. Seaport noted that the monthly decline was steeper than the roughly 8 percent drop typically seen in September.
The year-on-year contraction also came against an easier comparison, as September 2025 had been affected by a typhoon. Third-quarter GGR fell 3.8 percent from a year earlier.
While weakness during June and July had been attributed to the FIFA World Cup, Umansky said Seaport also believed demand at the ultra-high end of the market had deteriorated, potentially extending the slowdown into the coming months.
October faces demand and comparison pressures
Seaport forecasts October GGR of MOP22.87 billion ($2.84 billion), with continued demand softness compounded by a difficult comparison against high gaming hold in October last year.
Despite the projected October decline, the brokerage expects fourth-quarter GGR to be flat year-on-year. Its forecasts put full-year 2026 growth at 2.3 percent and 2027 growth at 3 percent, although Umansky cautioned: ‘Our models are under review.’
The September revenue mix also points to differing conditions across customer segments. Seaport estimates VIP GGR rose by a low-single-digit percentage year-on-year, supported by what it believed was a high VIP hold rate, while mass GGR declined by a low-single-digit percentage.
Higher visitor numbers have not translated into stronger revenue across the market. The brokerage estimates September arrivals increased 3.5 percent year-on-year, while mass GGR per visitor fell 5 percent. It attributed the dilution in revenue per visitor to growth in lower-spending and non-gaming visitors.
Overnight base-mass business remains particularly weak, estimated at around 30 percent below pre-pandemic levels. Seaport identified recovery among these customers as an important driver of sustained growth.
Operators also face continued pressure on profitability. Umansky said player reinvestment and agent commissions remained high, with little prospect of a near-term retreat, while operating expenses continued to rise against subdued revenue growth.
