Macau’s gaming sector is projected to outperform current market expectations in 2026, with analysts pointing to stronger-than-anticipated revenue growth driven by economic support in China and continued investment in tourism and entertainment offerings.

Research conducted by CBRE Equity Research indicates that gross gaming revenue (GGR) in Macau could increase by 8.3 percent year-on-year, exceeding the widely held market expectation of 6 percent growth. This outlook follows a solid start to the year, with GGR reaching MOP65.87 billion in the first quarter, reflecting a double-digit annual increase.

Analysts noted that current projections may underestimate the pace of expansion. They stated, “Macau GGR should top full-year 2026 consensus,” adding that for growth to align with consensus expectations, performance would need to slow significantly over the remainder of the year.

They further explained: “After the first quarter, GGR [growth] would need to decelerate to 3.5 percent for the remainder of the year… We believe [such] deceleration is unlikely.”

Growth outlook supported by economic factors

The expected increase in gaming revenue is closely tied to broader economic conditions in mainland China. Authorities have set a target for gross domestic product growth between 4.5 percent and 5.0 percent, which analysts believe will have a positive effect on consumer spending.

They said, “China is targeting 4.5% to 5.0% GDP growth and we expect Macau GGR to grow faster than GDP as the Chinese consumer continues to benefit from targeted stimulus.”

This macroeconomic backdrop is expected to support visitation levels in Macau, particularly among the base mass segment. Analysts highlighted that this group has yet to fully recover, leaving room for further gains as travel demand improves.

Investment by Macau’s concessionaires in non-gaming attractions is also expected to play a role in sustaining visitor growth. These efforts aim to broaden the appeal of the destination and encourage longer stays, which in turn can support gaming activity.

“The ongoing investment in entertainment in Macau should attract additional visitation, particularly from the base mass segment that has yet to fully recover,” analysts said, according to Inside Asian Gaming.

Market concerns remain despite strong performance

Despite the positive outlook for revenue, equity markets have not mirrored the operational performance of Macau’s gaming sector. Stocks tied to Macau casinos have declined so far this year, with US-listed operators down around 14 percent and Hong Kong-listed counterparts falling approximately 10 percent.

This gap between financial performance and market valuation has been attributed to concerns around sustainability of growth and pressure on profit margins. Rising operating costs and increased competition across operators have contributed to investor caution.

Late in 2025, both promotional activity and operating expenses rose noticeably. Market-wide commission spending increased by 21 percent year-on-year in the fourth quarter, accounting for 19.2 percent of GGR. At the same time, non-tax operating expenses climbed by 8.6 percent.

Analysts noted that much of the increase in promotional spending has been driven by a limited number of operators aiming to regain market share. One example cited was Las Vegas Sands, which has publicly indicated a more aggressive approach to the premium mass segment.

Even with these pressures, expectations suggest that cost-related concerns may ease over time. Analysts said, “We expect promotional activity to remain elevated but stabilise in full-year 2026, while opex growth should also normalise as many concession-related opex investments are now baked into the cost structure.”

Earnings outlook and operator performance

The strength of revenue growth in early 2026 has also influenced expectations for earnings. Analysts indicated that first-quarter performance has been sufficient to support continued EBITDA expansion for most operators, even those that may have sacrificed some market share.

They stated: “We believe the magnitude of topline growth in first quarter 2026 was enough to support continued EBITDA growth for most operators, even those that might have given up some GGR share in exchange for profitability.”

Among individual operators, Melco Resorts & Entertainment was highlighted as a company with potential upside. Despite challenges in late 2025 linked to higher operating costs, the company recorded a significant increase in Macau property EBITDA and outperformed the broader market.

Analysts suggested that Melco’s current valuation reflects market caution rather than underlying performance, noting that its shares remain “oversold.” They also pointed to ongoing efforts to reduce leverage, which could support improved shareholder returns over time.

Looking ahead, the combination of economic stimulus in China, continued investment in Macau’s tourism sector, and stabilizing cost pressures is expected to underpin further growth in the region’s gaming industry. While uncertainties remain in equity markets, revenue trends indicate that Macau’s gaming sector is positioned to exceed current expectations in 2026.