Analysts forecast a weak 2H26 for the Philippine gaming sector
The Philippine gaming industry could face a difficult second half of 2026 after the country’s gaming regulator warned that revenue may decline significantly amid softer casino demand and broader economic pressures.
Speaking earlier this month, PAGCOR Chairman Alejandro H Tengco said the industry may be heading for a weaker year, with gross gaming revenue expected to fall to between PHP 320 billion ($5.6 billion) and PHP 350 billion ($6.1 billion), representing a year-on-year decline of 12 to 19 per cent.
The warning comes as recent industry figures continue to show relatively soft gaming activity despite improving tourism and visitor arrivals. PAGCOR reported that gaming revenue declined by 16 per cent in the first half of 2026, showing a continuous slowdown across the sector.
Unicapital Securities equity research analyst Jeri R. Alfonso said the industry’s recent performance indicates that pressure on operators is likely to continue. Speaking to BusinessWorld Online, Alfonso noted that while tourism and visitor arrivals have improved, the increase has not translated into strong enough gaming activity, leaving many operators struggling to offset the broader challenges facing the sector.
Land-based venues see slowdown
Land-based casinos continue to bear the brunt of the slowdown, with weaker VIP gaming activity remaining a major concern for integrated resort operators that rely heavily on high-value customers. BDO Securities Corp. President John Tristan D. Reyes said the sector currently lacks clear growth drivers, especially in the brick-and-mortar casino segment.
While Chinese visitor arrivals have improved compared with previous years, premium gaming activity remains subdued. Reyes noted that local players continue to provide some support to casino revenues, but overall gaming volumes remain muted.
The industry’s reliance on VIP customers was evident during the latest earnings season. Major operators, including Bloomberry Resorts, Okada Manila and Travellers International, all reported weaker revenues, with analysts attributing much of the decline to softer high-roller activity.
However, online gaming continues to show stronger momentum. The analyst noted that online operators are benefiting from promotional campaigns, stronger customer engagement, and expansion into new market segments. Also, platforms like DigiPlus Interactive are expected to outperform many traditional casino businesses as consumer preferences continue shifting online.
Inflation may dampen spending
Analysts also pointed to broader economic pressures that continue to weigh on gaming activity. With household budgets stretched by inflation, many consumers are cutting back on discretionary spending and focusing more on essential expenses. Higher electricity bills, fuel costs and everyday living expenses have left less room for leisure spending, making casino visits and gambling activity easier to put off.
Geopolitical tensions remain yet another issue. Analysts believe that any new tensions between the United States and Iran will again drive oil prices higher, potentially weakening tourism demand and adding further pressure on household spending.
Despite the challenges, analysts believe a recovery remains possible if tourism activity continues to improve and broader economic conditions stabilise.
Higher visitor arrivals typically lead to increased spending across hotels, resorts, entertainment venues and casinos, providing a much-needed boost to the wider Philippine gaming industry. For now, however, analysts expect online gaming to remain the sector’s strongest performer while traditional casinos continue to navigate a difficult operating environment.
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