Macau’s gaming sector is bracing for a period of continued financial turbulence, though analysts suggest the most acute phase of the downturn may soon be in the rearview mirror. According to a recent assessment by Seaport Research Partners, while headwinds remain for the territory’s major operators as they head into the final quarter of 2026, the performance outlook shows signs of stabilizing compared to the sharper declines observed earlier this year.
In a briefing ahead of the third-quarter earnings season—kicking off with Las Vegas Sands—Seaport senior analyst Vitaly Umansky projected a more measured decline for the end of 2026. While the third quarter saw Gross Gaming Revenue (GGR) slip by 3.8% and EBITDA plummet by an estimated 10.6%, projections for the fourth quarter suggest a more modest contraction, with GGR expected to dip by just 0.7% and EBITDA by 3.4% year-on-year.
The current economic landscape in Macau has forced operators into a defensive posture. With top-line growth stagnating, the focus for casino firms has shifted toward internal efficiency. Umansky noted that “market share gains, opex control, and optimized player reinvestment and commission strategies” have become the primary battlegrounds for operators seeking to differentiate themselves in a tightening market.
One of the most persistent issues facing the industry has been the escalation of operational expenses and the high costs associated with maintaining player loyalty. For much of the past year, these factors have significantly eroded profit margins. However, there is a glimmer of optimism regarding cost management; Seaport estimates that expenditure increases will be significantly more muted in late 2026 and throughout 2027, with operational expenditure (opex) growth expected to hover around 4% next year.
Despite these cost-control measures, the environment remains challenging due to the heavy reliance on player reinvestment and agent commissions. Unlike in 2009, when the Macau government intervened to cap junket commissions at 1.25% of rolling chip turnover, analysts do not foresee regulatory intervention to curb these spending practices in the current cycle. Consequently, profit margins are expected to remain under pressure until broader, faster top-line growth re-emerges in the region.
As the industry prepares to report its Q3 figures, market observers are looking toward the sector’s two largest players, Sands and Galaxy, to demonstrate the most resilience. These two operators are expected to lead in both year-on-year and quarter-on-quarter market share gains. Conversely, other major players—including MGM, Wynn, Melco, and SJM—are projected to report further losses in market share. External pressures are also being felt abroad, with Marina Bay Sands in Singapore showing “considerable softness,” reflecting a regional trend of weakened consumer demand.
While Seaport Research Partners has adjusted downward its price targets for Macau-facing gaming operators in response to these persistent difficulties, the investment outlook remains cautiously optimistic. Current stock valuations, with the sector trading at an EV/EBITDA of 7.9x, are viewed by analysts as attractive. Umansky maintains that despite the inherent volatility associated with China-related market risks, current valuations offer investors a favorable risk-reward positioning for the medium to long term, suggesting that the industry’s fundamental value remains intact despite the immediate economic headwinds.
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