Macau casino growth set to lead in 2026 but profit margins stay tight

Morgan Stanley predicts Macau’s casino segment will outperform other leading gaming hubs based on casino revenue growth in 2026, however the firm also believes that margin improvement will still be a struggle.

According to Morgan Stanley, Macau’s gross gaming revenue will increase by about 6 percent year over year which is a far cry from other gaming locales like Las Vegas and Singapore where growth is estimated to be close to 1 percent.

This is due to another excellent year of Macau’s gaming industry that recorded GGR of MOP247.40 billion, registering a 9.1% increase. The full effect of the growth on the bottom line however is still missing. EBITDA is only expected to go up about 2 percent in 2026 which is not only disappointing but also a downward move from the prior year.

Pointing to ongoing competition for mid-tier players and consistently high promotional spending, the bank said:

We believe cost pressure, especially reinvestment, is structural due to premium mass focus.

Morgan Stanley also indicated that lower earnings could be the outcome. They explained that if margin pressure intensifies, it might lead to the underperformance of the entire sector. There could be several factors behind the possible weaker performance of the results. These include the slower economic growth in the second half of 2026 due to base effects, less Chinese mass market demand, raise in promotional allowances, and non-gaming expenses that do not drop.

Considering these concerns, the bank has downgraded the gaming sector’s forecast in Macau from outperform to in-line. They are also looking for a decrease in GGR growth from May onwards and second and third quarters possibly posting an EBITDA drop. The gaming industry is highly concentrated in Singapore with the two integrated resorts, Marina Bay Sands and Resorts World Sentosa, and the level of gaming is still forecasted to grow at a mid single-digit rate. However, such growth could be offset by the normalization of hold rates after a strong 2025.

The bank cautioned:

Following unusually strong hold rates at Marina Bay Sands in 2025, hold normalization will likely offset volume growth, leading to flat industry GGR and circa 1 percent year-on-year decline in EBITDA for Singapore in 2026.

Overall, while Macau is likely to lead in revenue growth, the real challenge in 2026 will be managing rising costs and tighter margins in a more competitive market.

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