Macau Casino Profits Slow Amid China Crackdown, Economy

A downturn in revenue at China’s only legal gambling jurisdiction has some investors and those in the industry concerned that Macau could see a slowdown not experienced since the COVID-19 pandemic.

The island’s gaming sector saw revenue declines in June and July, ending 16 straight months of growth. The falling revenue comes after a larger capital crackdown from Beijing.

According to the Japan Times, that has included taxing offshore trusts, cracking down on cross-border brokerages, and limiting citizens’ outbound investments, including to Hong Kong and Macau.

The island’s casinos cater to wealthy Chinese citizens. The moves are now limiting some of those high-rollers’ ability to hit the island’s gaming tables.

Headswinds For Casino Island

Financial turmoil often impacts Chinese high-rollers. The country’s capital markets have declined through 2026. The MSCI China Index has fallen about 7%.

“We predicted that June and July were going to be bad, but the actual numbers are even worse than our expectations, and that’s what the market is worried about,” Morningstar analyst Jennifer Song said. “The market’s biggest concern is if gaming revenue growth has slowed, then how are casinos able to maintain their margins while costs have increased?”

After the pandemic, Macau’s rebound was driven in part by typically smaller-stakes gamblers, rather than the “whales” that many properties cater to. However, the Wall Street Journal reported on Saturday that China’s overall economy has slowed. That could more broadly affect this segment of gamblers as well, who may not have as much disposable income to wager.

Last year, the island’s six casino resorts saw revenue and profits rise significantly, driven by equity gains. But the industry experienced double-digit drops in VIP and premium gamblers in June and July.

Some financial experts predicted a slowdown because of the World Cup. They admit, however, that this year’s falling numbers are more pronounced than expected.

Falling Profits Expected To Continue

Experts predict profit margins will tighten even more in the coming months. Casinos ramp up promotions with free hotel rooms and other offers meant to lure gamblers to the island.

Gaming revenue is expected to slow by 3% for the remainder of the year, according to Bloomberg. Combined profit predictions point to a 7% decrease for the second quarter.

“Underlying this are the lack of a wealth effect and cautious consumer sentiment in mainland China,” Natixis Senior Economist Gary Ng said. “And recent regulatory changes on taxes and cross-border capital flows can exert greater pressure.”

The island celebrated 25 years of Chinese rule in 2024. President Xi Jinping has said the city needs to diversify its economy away from being so heavily reliant on the casino industry.

Also in 2024, the Macau poker scene experienced a bit of a revival after the pandemic shut down the game at casinos. A World Poker Tour event was planned, but it was ultimately canceled.