Macau Casinos Face Q3 Profit Drop, CLSA and Goldman Warn

Macau's casino operators are heading into third-quarter earnings season under pressure. Two major brokerages expect their profits to decline from a year earlier.

CLSA forecasts sector EBITDA will drop 11% year on year to US$1.84 billion in the third quarter. It blames weaker gaming revenue and higher operating costs. Goldman Sachs also forecasts a year-on-year decline, putting EBITDA 9% lower at US$1.95 billion.

Both forecasts arrive as Macau's gaming revenue extends its losing streak to four months. Official data show September revenue hit its lowest level of 2026. According to CLSA, rising commissions are a key driver of the expected profit decline.

Rising Commissions and Softer GGR Weigh on CLSA's Q3 Outlook

CLSA's forecast centers on the cost of attracting players. The brokerage expects commissions and rebates to reach US$1.54 billion in the quarter, up from US$1.44 billion a year earlier.

As a share of gross gaming revenue (GGR), those costs would rise to 20.7% from 18.6%. CLSA estimates third-quarter GGR at MOP60.2 billion (US$7.45 billion), down 3.8% from a year earlier.

Weaker revenue leaves operators less room to absorb the higher costs.

The brokerage also expects Sands China's operating expenses to climb 12% year on year, reflecting changes to its player reinvestment strategy. CLSA says above-normal VIP win rates will only partly offset these pressures.

Goldman Sees EBITDA Rebound From Q2 Despite Soft Gaming Demand

Goldman Sachs takes a somewhat brighter view of the quarter. The bank expects sector EBITDA to rise 5% from the second quarter. It credits a seasonal lift in summer non-gaming revenue, stable competition, and cost controls.

Goldman also expects the EBITDA margin on gross revenue to recover to 21.8% from 20.9%. Even so, the bank says gaming revenue stayed soft through the quarter. It cites spending diverted to the World Cup, as well as a 30% to 40% jump in international airfares. Weaker stock markets and tighter mainland capital controls also hurt sentiment.

Goldman maintained Buy ratings on Galaxy Entertainment, Sands China, Wynn Macau, Melco, and MGM China.

September GGR Hits 2026 Low as CLSA Holds Neutral Outlook

The forecasts follow a weak run of official data. Macau's Gaming Inspection and Coordination Bureau (DICJ) reported September GGR of MOP18.06 billion. GGR for the first nine months rose 3.2% year on year to MOP187.1 billion.

CLSA maintains a neutral view on the sector for the next six months. It forecasts fourth-quarter GGR to dip about 1% year on year and full-year 2027 GGR to grow 2%. Investors will get clearer answers when operators report third-quarter results. Las Vegas Sands, the parent of Sands China, is due to report later this month.