Morgan Stanley Trims Its 2026 Macau Gaming Revenue Forecast, Citing Slower Growth and a World Cup Drag

Morgan Stanley has cut its outlook for Macau’s casino sector, lowering both its 2026 gross gaming revenue (GGR) and earnings forecasts as it warns of slower growth, a temporary World Cup drag, and a structurally higher cost base squeezing operator margins. The downgrade also reshuffles the bank’s view of which operators will gain and lose ground heading into second-quarter earnings. Here is a research-backed breakdown of the numbers and what they mean.

The Revised Revenue Forecast

The bank now projects full-year 2026 Macau GGR of about MOP260.6 billion (roughly US$32.3 billion), up from MOP247.40 billion in 2025 — implying annual growth of around 5.3%, below both its earlier estimate and the broader market’s roughly 6% expectation. Analysts Praveen Choudhary and Stephen Grambling wrote that they expect 2026 GGR to grow 5.3% year-on-year, “below consensus expectations of 6 percent,” and that quarterly growth is likely to stay muted at just 2–3% year-on-year through the fourth quarter of 2026. Notably, the cut came even though Macau had just posted its strongest May since the pandemic, with monthly GGR up 6.7% year-on-year to about US$2.8 billion.

The World Cup Wobble

One near-term swing factor is football. The analysts cautioned that “June and July could see slowdowns related to the [FIFA] World Cup and might even post a negative year-on-year growth number” — a familiar pattern in which major sporting events temporarily divert both attention and discretionary spending away from the casino floor. It’s framed as a short-term disruption rather than a structural shift, but it adds volatility to an already cautious outlook.

Weaker Earnings, Higher Costs

Alongside the softer revenue call, Morgan Stanley trimmed its 2026 industry EBITDA growth estimate to 1% from a prior 2%, projecting aggregate corporate EBITDA across Macau’s six concessionaires of just under US$7.93 billion. The bank pointed to slower top-line growth combined with a “structurally-higher cost base” — elevated promotional allowances, player reinvestment, and non-gaming expenses — and warned that “negative EBITDA estimate revisions” are likely to continue. Its most significant operator-level downgrades were tied to Sands China and SJM Holdings, driven by weaker expected second-quarter performance.

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The Forecast at a Glance

The Market-Share Reshuffle

Ahead of second-quarter earnings, Morgan Stanley flagged notable shifts in operator market share. It expects Sands China and Melco Resorts to cede ground while MGM China and Wynn Macau gain. Specifically, Sands China’s GGR share is seen falling 2.6 percentage points to 23.6%, and Melco’s slipping 0.8 points to 14.4%. By contrast, MGM China is projected to rise 1.2 points to 17.0%, and Wynn Macau 1.3 points to 13.9%. On those assumptions, the bank said MGM China and Wynn Macau are positioned to exceed consensus EBITDA estimates by roughly 9–10% in the quarter, with relatively stronger first-half momentum and fewer downside risks to estimates.

Second-Quarter Setup

For the second quarter specifically, the bank estimated total Macau property EBITDA of just under US$2.08 billion — a sequential decline of about 4.9% from roughly US$2.19 billion in the prior quarter — with performance broadly flat year-on-year. Morgan Stanley noted that while some operators may beat expectations, others face tougher comparisons: “Peers appear to face higher hurdles, with required growth appearing more back-ended and dependent on a recovery in share.” In other words, the easy year-on-year gains have largely been made, and further upside increasingly hinges on winning share from rivals.

The Cautious Call and a Preferred Pick

The bank remains cautious on Macau gaming equities despite valuations that look attractive on paper, arguing that recent GGR trends plus negative operating leverage keep driving downward revisions. It also observed that investors have been slow to reward the concessionaires’ free-cash-flow generation and dividend yields. Within the group, Morgan Stanley highlighted MGM China as a preferred name: it downgraded the stock to “Equal Weight” in December 2025 after a sharp royalty-payment jump drove negative EBITDA revisions it believes are now complete, and it credited MGM China with holding share despite strong competition, one of the lowest capex levels, a better balance sheet, and less risk of further negative revisions. (For context, a rise in MGM China’s license-fee/royalty rate to its U.S. parent had been a notable 2026 headwind.)

Why It Matters

Morgan Stanley’s revision is a useful barometer for a Macau recovery that is real but decelerating. GGR is still growing — and the bank has elsewhere argued Macau should outpace Singapore and Las Vegas — but the combination of high-single-digit revenue growth giving way to mid-single-digit, a structurally higher cost base, and share shifting toward MGM and Wynn means the investment case is increasingly about operator selection rather than a rising tide lifting all boats. For investors and operators alike, the message is that Macau’s post-pandemic rebound is entering a more competitive, margin-conscious phase.

Sources and Further Reading

World Casino News – “Morgan Stanley Cuts Macau 2026 Gaming Revenue Outlook” (reference article)

GGRAsia – “MS cuts 2026 Macau GGR forecast and industry EBITDA estimate” (analyst quotes; share data)

Asia Gaming Brief (AGB) / SiGMA – GGR, EBITDA, and operator-level detail; strong-May context

Casino.org – “Morgan Stanley: Pass on Macau Casino Stocks as GGR Growth Stalls” (MGM China preferred; LVS/Melco/SJM caution)

Focus Gaming News / Yogonet – sector view, royalty-cost backdrop, and Singapore/Las Vegas comparison

Note: Figures are Morgan Stanley estimates as reported in June 2026 and are subject to revision; analyst forecasts are opinions, not guarantees, and are attributed above. This article is for informational purposes only and is not investment advice.