Macau’s gaming industry is facing a more cautious outlook after a series of forecast downgrades from major financial institutions, with analysts lowering expectations for gross gaming revenue (GGR), casino earnings and economic growth in 2026.
The FIFA World Cup, which ran from 11 June to 19 July 2026, has been widely blamed for weaker gaming activity in the city in recent months. This year’s tournament featured 104 matches compared to the 2018 edition, which had 64. The World Cup shifted consumer spending toward sports betting and other forms of entertainment, especially among high-spending players. However, industry observers believe the tournament may have revealed bigger issues within one of the world’s largest casino markets.
Speaking exclusively to SiGMA News, Shaun McCamley, President of Euro Pacific Asia (EPA) Management Consulting, believes the tournament should be viewed as a stress test rather than the sole cause of the slowdown. “My view is that the World Cup is a temporary headwind, but it has acted as a stress test. It has shown that Macau’s growth is becoming less automatic and more sensitive to external distractions, economic conditions and operational execution.”
Over the past six weeks, Citigroup, Morgan Stanley, Macquarie, Jefferies, CLSA and the International Monetary Fund (IMF) have all revised expectations for Macau’s gaming sector and wider economy, pointing to softer premium-player demand, slower economic growth in mainland China and increasing regional competition.
McCamley said the World Cup has distorted short-term performance but also revealed longer-term pressures facing Macau’s casino industry. “The FIFA World Cup has undoubtedly distorted the short-term picture. Major sporting events temporarily redirect both attention and discretionary wagering expenditure, and the expanded tournament created a longer and potentially more pronounced disruption than in previous years,” he said.
Macau GGR forecasts downgraded across the industry
The most visible sign of the slowdown has been a series of reductions to Macau GGR forecasts. Macquarie recently lowered its third-quarter Macau GGR growth forecast from 6 per cent to 2 per cent year-on-year and reduced its full-year 2026 growth forecast from 7.7 per cent to 5.4 per cent after June revenue fell more sharply than expected.
Morgan Stanley also cut its Macau GGR outlook, forecasting approximately MOP260.6 billion ($32.3 billion) in gaming revenue for 2026, representing growth of around 5.3 per cent, which is below broader market expectations.
Citigroup has become increasingly cautious about near-term performance, forecasting a July GGR of MOP21.0 billion ($2.60 billion), down 5 per cent year-on-year, despite signs that casino activity has begun to stabilise following the conclusion of the FIFA World Cup.
The downgrades follow Macau’s first monthly decline in gaming revenue since January 2025. June GGR fell 12.1 per cent year-on-year to MOP18.52 billion ($2.29 billion), while second-quarter industry EBITDA is expected to decline 7 per cent to approximately $1.92 billion, according to Citigroup.
Premium players and VIP demand remain under pressure
Analysts have increasingly focused on the decline in premium mass and VIP customers. These groups have become crucial for making profits since Macau reopened after the pandemic. Citigroup’s latest survey on premium mass gambling shows that total wagers dropped 38 per cent year-on-year in June. The number of premium mass players also fell by 29 per cent. Average wager sizes decreased by 13 per cent.
At the same time, Macau’s VIP baccarat segment has shown signs of slowing. Second-quarter VIP baccarat revenue declined 18.8 per cent quarter-on-quarter to MOP15.90 billion ($1.97 billion), according to Gaming Inspection and Coordination Bureau (DICJ) data. The weakness comes at a time when operators are increasingly reliant on premium mass customers to offset the decline of Macau’s former junket-driven VIP business model.
According to McCamley, this represents a structural shift rather than a temporary downturn. “The VIP and junket-led model that previously generated exceptional volumes is not returning in its former shape. Operators must now generate more value from mass and premium-mass customers while simultaneously funding significant non-gaming and diversification commitments.”
IMF warns Macau growth is entering a slower phase
The concerns extend beyond casino floors. The IMF recently lowered its Macau GDP growth forecast to 3.3 per cent for 2026, down from economic growth of 4.7 per cent in 2025. Although Macau’s economy expanded 7.1 per cent year-on-year during the first quarter, the IMF said the recovery remains incomplete and uneven.
Gaming revenue remains approximately 15 per cent below pre-pandemic levels despite visitor arrivals exceeding 2019 volumes. The IMF also warned that Macau’s medium-term growth could slow to around 3 per cent, citing weaker economic growth in mainland China and Hong Kong, rising competition and continued dependence on gaming revenue.
Gaming taxes are crucial to Macau’s public finances. They generated MOP51.19 billion ($6.3 billion) in the first half of 2026. This revenue makes up about 86 per cent of the total government income.
Regional competition is becoming a bigger challenge
Another concern highlighted by both the IMF and industry executives is increasing competition across Asia’s integrated resort market. New tourism and entertainment destinations across the region are providing customers with more alternatives than ever before.
McCamley said Macau can no longer rely solely on its historical advantages. “Regional competition is also becoming more relevant. Customers now have a wider range of integrated-resort and entertainment choices across Asia, and Macau can no longer rely solely on gaming scale and proximity to mainland China.”
“It must compete through service, entertainment, technology, loyalty and a much broader destination experience,” he said. The comments come as Macau’s concessionaires continue to invest billions in non-gaming projects under their concession agreements, including entertainment, cultural attractions, sporting events, and family-focused tourism initiatives.
Recovery continues, but growth is becoming harder
Despite the recent wave of downgrades, analysts do not believe Macau’s recovery has stalled entirely. First-half GGR still reached MOP126.90 billion ($15.70 billion), up 6.8 per cent year-on-year, while visitor arrivals remain above pre-pandemic levels. However, the consensus among banks, economists and industry executives is that Macau has entered a different stage of recovery.
The quick recovery from reopening demand and returning tourism seems to be slowing down. It’s being replaced by a more stable growth period. In this phase, market share, customer quality, operational efficiency, and efforts to diversify will become more important. As McCamley concluded, “The recovery is not over, but the easy phase of the recovery probably is.”
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