Macau Casino Slump Deepens as China Capital Controls Pressure VIP Demand

MACAU: Macau’s casino recovery has hit its sharpest setback since the market reopened from the pandemic. Weaker premium play and concerns over Chinese capital flows are now raising questions about revenue growth and casino margins.

The slowdown ended 16 consecutive months of year-over-year gaming growth in June, while Bloomberg reported continued weakness among VIP and premium customers during July. Casino shares have fallen as investors assess whether the decline is temporary or could extend through the second half of 2026.

June Revenue Ends 16-Month Growth Run

Figures from Macau’s Gaming Inspection and Coordination Bureau show gross gaming revenue fell 12.1% year over year in June to MOP18.52 billion, approximately $2.3 billion. Revenue was also 18.1% below May, although first-half GGR remained 6.8% higher than a year earlier at MOP126.9 billion.

The weakness was particularly visible at the higher end of the market. VIP baccarat generated MOP15.9 billion during the second quarter, down 18.8% from MOP19.58 billion in the first three months of the year. Overall second-quarter games-of-fortune revenue slipped to MOP61.03 billion from MOP65.87 billion in Q1.

Citigroup surveys cited by Bloomberg also showed double-digit declines in the number of VIP and premium players and their spending during June and July. The FIFA World Cup has been identified as one temporary factor, with major soccer tournaments historically diverting some gambling budgets away from casino play.

Capital Controls Add Pressure on Premium Players

Analysts are also monitoring tighter controls on money leaving mainland China. Recent measures include greater scrutiny of cross-border brokerage activity, offshore trusts and some forms of outbound investment, which analysts say may affect wealthy customers more heavily than Macau’s broader mass market.

The pressure comes as Chinese consumer confidence and financial markets remain subdued. Gary Ng, senior economist at Natixis, said a weaker wealth effect and cautious mainland sentiment were underlying the slowdown, with recent tax and cross-border capital changes creating additional pressure.

Macau had already been shifting toward slower, more constrained growth following the post-pandemic rebound. Earlier analysis of the changing Macau casino market highlighted greater reliance on premium mass customers and a smaller role for the traditional junket-driven VIP business.

Analysts Cut 2026 Growth Forecasts

Bloomberg’s monthly survey of brokerages now points to approximately 3% Macau gaming revenue growth for 2026, down from a 7% forecast at the start of the year. At that pace, annual gaming revenue would remain about 13% below its 2019 level.

Margin pressure is another concern. Operators have increased spending on complimentary hotel rooms, dining, entertainment, commissions and rebates to attract valuable customers, making weaker revenue more difficult to absorb. Bloomberg reported that combined casino operator profits are expected to decline 7% in the second quarter.

The Bloomberg Intelligence index of Macau casino operators was down about 22% for the year by Friday, with MGM China falling 6.1% during the session. Las Vegas Sands and MGM have reported weaker margins in Macau, while Wynn’s margin improved slightly.

Casino activity strengthened during the second half of July following the World Cup, providing some evidence that part of the downturn may prove temporary. Analysts now see August, historically a stronger month for Macau, as an important test of whether gaming demand can recover or whether weaker premium spending will persist.

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