The coming months will continue to see headwinds for Macau’s gaming operators, but not as severe as the September 2026 quarter and with easing comparisons heading into the second half of 2027, according to Seaport Research Partners.
In an overnight note previewing Macau’s 3Q26 earnings season – which kicks off with Las Vegas Sands on Thursday – Seaport’s senior analyst Vitaly Umansky said he estimates Q4 GGR to fall by 0.7% and EBITDA by 3.4% year-on-year compared with a GGR decline of 3.8% in Q3 and an estimated 10.6% fall in EBITDA.
“Market share gains, opex control and optimized player reinvestment and commissions strategies are now critically important differentiators (in a temporarily slower growth market),” he said.
“While heavy player reinvestment and cost escalations in Macau have impacted margins, we believe cost increases in Q4 and 2027 will be muted, with opex growth in the 4% range next year. Player reinvestment and agent commissions remain high, and we do not foresee any improvement in the market in the near/medium term, but we will see a continued stable environment.”
Umansky added that he does not expect the government to step in to limit commissions or player reinvestment as it famously did in 2009 when it capped junket commissions at 1.25% of rolling chip turnover. As such, “Margins in Macau will remain pressured until we see faster top line growth materialize,” he added.
For 3Q26, the analyst explained that he expects Macau’s two market share leaders – Sands and Galaxy – to show the strongest year-on-year and quarter-on-quarter gains during the upcoming results season, with MGM, Wynn, Melco and SJM all to report share loss. LVS’s Singapore business, Marina Bay Sands, is also forecast to show “considerable softness” in part due to the same demand weakness as seen in Macau.
However, while Umansky has adjusted downwards his price targets for all Macau-facing operators, he maintains that current stock price valuations remain largely too low and therefore provide favorable risk/reward positioning over the medium/long term.
With the sector currently trading at an EV/EBITDA of 7.9x, “we believe investors are being well compensated to take on China-related risk,” he said.
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