CLSA warns of a potential downward revision of Macau's GGR following Investors' Forum

CLSA Ltd. raised the alarm regarding the outlook for the gaming industry in Macau following its Investors' Forum 2026, and warned on September 30, 2026, that the risks of a “downward revision of consensus” in earnings forecasts have increased. The firm stated that investor enthusiasm is “lukewarm” and has already downgraded its earnings forecasts for 2027 and 2028; it maintains a cautious outlook on Macau's gross gaming revenue (GGR) for the fourth quarter.

Current status: lukewarm enthusiasm and cut forecasts for Macau's GGR

CLSA maintains a forecast that Macau's gross gaming revenue (GGR) will decline by 0.9% year-on-year to MOP65.5 billion (US$8.11 billion) in the fourth quarter. The brokerage described the response from market participants at its 33rd Investors' Forum as “lukewarm enthusiasm” towards Macau gaming stocks. Jeffrey Kiang, an analyst at CLSA, wrote that investors “do not see imminent signs that might reaccelerate gaming revenue growth.”

“From our meetings with investors at our 33rd Investors’ Forum, investors’ enthusiasm on Macau gaming remains lukewarm, and they do not see imminent signs that might reaccelerate gaming revenue growth.” — Jeffrey Kiang, CLSA Ltd.

CLSA added that new Chinese tax rules regarding offshore trusts “do not help” the perception among some investors. The brokerage had already reduced its GGR forecasts for 2027 and 2028 in mid-September and remains cautious after cutting its growth estimate for GGR for 2027 to 2% year-on-year, to MOP259.2 billion.

Why CLSA fears a downward revision of consensus

The brokerage argues that the risk of analysts and investors downgrading their earnings projections has escalated for several reasons: modest revenue growth across the market, competitive pressure among concessionaires, and the interaction between margins and operating costs. CLSA noted that with GGR growth around 2% in 2027, there is limited room for margin expansion among the six operators in Macau, as operating expenses and player rebates are likely to grow at a faster pace.

CLSA's memo also highlights that, in a context of moderate revenue growth, investors have placed particular focus on GGR market share as an indicator of each concessionaire’s ability to sustain profitability.

Table of market share of tables and performance by operator (CLSA observations)

CLSA provided observations based on its channel checks in July and August 2026 regarding GGR table share among leading operators:

• Galaxy Entertainment Group Ltd and Sands China Ltd reported a sequential improvement in table share compared to the second quarter of 2026.

• MGM China Holdings Ltd maintained its table share in July and August, which CLSA characterized as “challenging the weak seasonality so far.”

The brokerage points out that competition among concessionaires is “rational,” but investors fear that such competition could weigh down the profitability of companies.

Sector valuation and preference for dividends

CLSA calculated that the sector trades at 8.4 times the estimated EV/EBITDA for 2027. This valuation, combined with the perception of limited growth, leads investors to seek companies that increase dividends. Jeffrey Kiang pointed out that investors “continue to seek companies with increasing dividends, as balance sheet strength improves and investment opportunities in the region diminish.”

The preference for dividends emerges as a selection criterion when the market sees fewer opportunities for profitable reinvestment. CLSA believes that the balance between capital distribution and investment needs will be a key factor for capital allocation by the market.

Implications for concessionaires and Macau's capital markets

A downwardly adjusted GGR growth and pressure on margins would compel operators to manage costs and revisit business policies. CLSA insists that under its moderate growth scenario, player rebates and operating expenses could erode operating margin if companies attempt to sustain or gain market share through incentives.

For asset managers and investors tracking the segment, the signals are clear: increased scrutiny on market share, sensitivity to fiscal changes, and a preference for companies capable of sustaining or increasing dividends. CLSA's document notes that market sentiment following the Investors' Forum does not provide immediate catalysts for a rapid GGR rebound.

What to watch in upcoming releases and data

Analysts and investors will be attentive to several concrete signals in the upcoming quarters:

1. Official GGR releases confirming quarterly trends against CLSA's forecast of MOP65.5 billion in the fourth quarter.

2. Changes in table share by operator, especially for Galaxy Entertainment Group Ltd, Sands China Ltd, and MGM China Holdings Ltd.

3. Communications regarding dividend policy and capital expenditure from the six Macau concessionaires.

CLSA makes it clear that, as long as moderate growth predominates and investor appetite does not reactivate, the risk of downward adjustments in consensus estimates will remain.

“We remain cautious following our recent cut in 2027 gross gaming revenue forecast to 2 percent year-on-year growth, to MOP259.2 billion.” — Jeffrey Kiang, CLSA Ltd.