Golden Week provides only a seasonal lift – The sluggish gross gaming revenue (GGR) seen since June extended into October, despite the National Day Golden Week holiday. Macau’s GGR fell 10% YoY to MOP21.7bn, representing the fifth consecutive monthly YoY decline, although GGR rebounded 20% MoM from September’s seasonal low. The result was broadly in line with market expectations. Cumulative GGR for the first ten months reached MOP209bn, up 1.6% YoY, with the growth momentum continuing to slow from the strong 14.2% YoY expansion recorded in 1Q. While tourist arrivals rose during the holiday period, the increase failed to translate into proportionate gaming spending, underscoring the decline of per capita spending on gaming.

Customer mix and spending patterns changes weigh on revenue – The visitor base has increasingly shifted toward mass-market leisure and family travelers, who typically generate lower gaming spending and shorter playtime than premium customers. At the same time, high-value players have become more cautious amid softer mainland economic sentiment and tighter scrutiny of cross-border fund flows, leading to smaller bets and lower VIP turnover. Unless average spend recovers, the sector may remain under pressure even if tourist arrivals stay robust.

Our view:

Looking ahead, we expect Macau gaming to remain soft in the remainer of 2026. Based on recent historical patterns, November and December are likely to see MoM decline as seasonal demand normalizes. As a result, full-year GGR is likely to be flat to low-single-digit YoY growth, slightly better than the government’s full-year forecast of MOP236bn, which implies a 4.6% YoY decline.

Among major gaming operators, we favor Galaxy Entertainment (27 HK, HK$33.26, HK$146bn), given its leading position in non-gaming diversification and large-scale properties. We also like Sands China (1928 HK, HK$11.01, HK$89.1bn) and MGM China (2282 HK, HK$9.69, HK$36.8bn) for their attractive dividend yields of ~9% and ~5.2%, respectively. Galaxy Entertainment, Sands China and MGM China are trading at 13.5x/13.4x/8.9x for FY26E P/E, respectively. (Amelia Deng)