Macquarie Cuts Macau Gaming Forecasts on Weaker Revenue Growth

Macquarie has downgraded its outlook for Macau’s gaming sector, cutting its earnings and revenue forecasts for 2026 due to a slowdown in gross gaming revenue (GGR) growth during the second quarter. The revision reflects concerns over the near-term performance of the world's largest gambling hub.

Revised 2026 Outlook

Citing the weaker-than-anticipated results, Macquarie lowered its second-quarter 2026 adjusted EBITDA forecast for the sector by 9.2%. The investment bank now projects that sector-wide adjusted EBITDA will decline 4.6% year-over-year for the quarter.

Looking at the full year, Macquarie reduced its industry GGR forecast to MOP256 billion, down from a previous estimate of MOP262 billion. This adjustment lowers the expected year-over-year growth rate to 3.4% from 6%. The bank now anticipates that third-quarter GGR will remain flat compared to the same period last year.

Market Share and Near-Term Headwinds

Macquarie's analysis highlighted shifts in market share among the major operators during the second quarter:

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• Wynn Macau was the primary gainer, increasing its market share by 1.5 percentage points quarter-over-quarter.
• Sands China lost 2.5 percentage points of share from the prior quarter, though it expanded its share by 1.0 percentage point year-over-year.
• SJM Holdings saw a 2.0 percentage point year-over-year contraction, which the bank attributed to losses related to satellite casinos.
• Galaxy Entertainment maintained a stable market share of 20.5%.

The bank noted that a "World Cup diversion effect" is expected to continue impacting results in July. Month-to-date average daily revenue has fallen 13% year-over-year, leading to a projected GGR decline of 7-11% for the full month. However, Macquarie anticipates a rebound in September with high-teens growth, largely due to a low base of comparison created by a typhoon disruption last year.

Investor Perspective

From a valuation standpoint, Macquarie observed that the Macau gaming sector is trading at 7-9 times earnings, which is near historical trough levels. The bank also pointed to dividend yields across the sector, with Wynn Macau offering approximately 9%, Sands China at 7.5%, and Galaxy and MGM China at 5.4% and 5.9%, respectively.

In its note, Macquarie suggested that investors could monitor for potential re-entry opportunities following the release of second-quarter financial results.