CLSA has cut its 2027 Macau gross gaming revenue (GGR) forecast by 4 percent, warning that muted revenue growth and persistent operating cost pressure are likely to limit margin recovery across the casino sector.
The brokerage now expects GGR to reach MOP259.2 billion ($32.2 billion) next year, representing growth of 2.4 percent year-on-year. It also reduced its 2028 forecast by 3 percent to MOP270.4 billion ($33.6 billion), while still projecting annual growth of 4.3 percent.
CLSA said in a report dated September 15th that it had become more cautious because it had ‘not seen enough supportive macro indicators.’
Growth in 2027 is expected to come mainly from higher visitation, aided by an easier comparison base during June and July and a stronger renminbi against the Macanese pataca. The brokerage assumes GGR per visitor will remain broadly stable.
However, CLSA said catalysts for a stronger phase of growth ‘do not appear to be imminent,’ suggesting that margin pressure could persist through 2027.
Costs outpace revenue
The caution follows weaker profitability in the second quarter of 2026. Aggregate property-level operating expenses, excluding depreciation and amortization, rose 2 percent year-on-year, while market-wide GGR declined 0.1 percent.
Reported EBITDA across the sector fell 10.7 percent to $1.81 billion, coming in 2 percent below CLSA’s previous estimate. EBITDA as a percentage of GGR contracted to 24.2 percent from 26.8 percent a year earlier.
The brokerage said operating cost pressure ‘does not dissipate easily,’ pointing to annual salary increases announced by Macau’s six concessionaires since 2024. It said EBITDA margin expansion would be difficult if GGR continued to grow only at a low-single-digit rate.
CLSA also cited weakness in a China upstream-sector indicator that it uses to assess the outlook for Macau’s premium gaming business. The spread between China’s producer price index and purchasing price index has been negative since February and widened to negative 3.31 percentage points in August, mainly due to higher oil prices.
The brokerage said the indicator has led year-on-year changes in Macau GGR by about six months since 2005. China’s consumer confidence and expectation indices also remained at 86 to 87 between March and July, below their February level of 88.
For 2026, CLSA kept its full-year GGR forecast broadly unchanged at MOP253.2 billion ($31.4 billion). It raised its September estimate to MOP18.6 billion ($2.31 billion), up 1.7 percent year-on-year, due to an easier comparison after a typhoon-related casino closure last year.
The brokerage nevertheless expects fourth-quarter GGR to decline 0.8 percent to MOP65.5 billion ($8.13 billion), citing an unusually high VIP win-rate comparison in the final quarter of 2025.
