CLSA Lowers Macau 2027 GGR Outlook as Casino Margins Face Pressure

CLSA has cut back its estimates for Macau gross gaming revenue (GGR) for 2027 by 4% owing to lower revenue growth and increasing operational cost pressure within the casino industry.

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According to CLSA, Macau’s GGR is estimated to amount to MOP259.2 billion ($32.2 billion) in 2027, which will account for a yearly increase of 2.4%.

CLSA also lowered its forecast for 2028 GGR by 3% to MOP270.4 billion ($33.6 billion). Even after lowering the estimate, the brokerage firm sees 4.3% growth per year in 2028.

As noted in a report issued on September 15, the brokerage has taken a more conservative view due to a lack of positive macroeconomic signals.

CLSA expects the growth in 2027 to be driven mostly by visitation. It noted that an easier comparison base during June and July, along with a stronger renminbi against the Macanese pataca, could support the market.

However, CLSA assumes that GGR per visitor will remain broadly stable. It said catalysts for a stronger period of growth do not appear to be close, meaning margin pressure could continue through 2027.

Costs Continue to Outpace Revenue

The cautious outlook follows weaker profitability across Macau’s casino sector during the second quarter of 2026.

Aggregate property-level operating expenses, excluding depreciation and amortization, rose 2% year-on-year. During the same period, market-wide GGR declined 0.1%.

Reported EBITDA across the sector fell 10.7% to $1.81 billion. The result was also 2% below CLSA’s earlier estimate.

The ratio of EBITDA to GGR came in at 24.2%, down from 26.8% in the previous year. This indicates that costs of operations have continued to impact profits despite relatively unchanged revenues from the gaming segment.

CLSA said operating cost pressure does not fade easily. The brokerage pointed to annual salary increases announced by Macau’s 6 concessionaires since 2024.

The firm said EBITDA margin expansion could remain difficult if GGR continues to grow only at a low-single-digit rate. With revenue growth limited, higher operating expenses could continue reducing casino profitability.

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China Indicators Remain Weak

CLSA also cited a China upstream-sector indicator used 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. It widened to negative 3.31 percentage points in August, mainly due to higher oil prices.

According to CLSA, this indicator has led year-on-year changes in Macau GGR by around 6 months since 2005.

The brokerage also noted that China’s consumer confidence and expectation indices remained between 86 and 87 from March to July. This was below the February level of 88.

The weaker indicators supported CLSA’s cautious stance on Macau’s future revenue growth. They also contributed to the view that a stronger phase of expansion is not likely to begin soon.

2026 Forecast Mostly Unchanged

For 2026, CLSA kept its full-year Macau GGR forecast broadly unchanged at MOP253.2 billion, or $31.4 billion.

The brokerage raised its September GGR estimate to MOP18.6 billion, or $2.31 billion. This would represent a 1.7% year-on-year increase.

CLSA said the higher September estimate was based on an easier comparison after casino closures linked to a typhoon in the same month last year.

However, the brokerage expects fourth-quarter GGR to decline 0.8% year-on-year to MOP65.5 billion, or $8.13 billion.

The expected decline is linked to an unusually high VIP win-rate comparison in the final quarter of 2025.

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Source: Asia Gaming Brief