Inflation, Lack of VIP Players Weigh on Philippine Land-Based Casinos

Maybank Investment Bank has said the Philippine gaming industry could face pressure in the second half of 2026, with brick-and-mortar casinos seen as especially exposed to inflation, higher utility costs, and a weaker VIP segment. The bank said online gaming remains the sector’s brighter spot, even as land-based operations continue to face headwinds.

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Land-Based Segment Under Pressure

In a memo on Wednesday, Maybank said brick-and-mortar casinos are likely to feel the strain from inflation and high utility costs, which are cutting into disposable income. It further cited the absence of VIP high-rollers, which is connected to lower-than-projected performance in the tourism sector.

The comments were issued following the reporting of the Philippines showing first-quarter tourist arrivals climbing by 2.6% year-on-year to reach about 1.76 million. The rise came amid growth across most of its key markets, except for South Korea and China.

Maybank noted that despite the improvement in visitor numbers, the overall environment still appears difficult for physical casinos. The bank’s view suggests that traffic gains alone may not be enough to offset weaker spending from premium players and rising operating costs.

GGR Outlook Remains Soft

The Maybank report alluded to remarks made earlier in June by Alejandro Tengco, chairman and CEO of the Philippine Amusement and Gaming Corporation. According to him, the Philippine gaming industry may post up to an 19% reduction in gross gaming revenue.

Tengco noted that GGR could drop to PHP320 billion or US$5.20 billion by 2026, compared to PHP396.14 billion seen in 2025. That earlier total reflected a year in which online gaming took the lead.

The bank’s memo placed those comments alongside its own view that the second half of the year may remain difficult for land-based casinos. With inflation still affecting household spending and utility costs remaining elevated, the sector may continue to struggle to regain stronger momentum.

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Online Gaming Keeps Lead

While Maybank was cautious on land-based gaming, it said online gaming remains the industry’s primary bright spot. The bank pointed to operators such as Philippines-listed DigiPlus Interactive Corp, which it expects to outperform by using promotional activity and expanding into lower-income segments.

That contrast highlights the split within the Philippine gaming market. Physical casinos are being pressured by cost and demand issues, while online operators continue to benefit from wider reach and a different customer mix.

The bank’s comments suggest that the industry’s growth story is increasingly shifting toward digital channels, even as land-based venues continue to absorb the effects of slower tourism growth and tighter consumer spending.

Second-Half View

Maybank’s assessment points to a mixed outlook for the Philippine gaming sector in 2H 2026. Land-based casinos face pressure from inflation, high utility costs, and the absence of strong VIP traffic, while online gaming remains positioned as the segment with better near-term prospects.

With GGR forecasts already under scrutiny and market conditions still uneven, the gap between physical casinos and online operators may remain a defining feature of the sector through the rest of the year.

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Source: GGR Asia