Gaming sector seen to post modest growth in 2026 — analysts

By Alexandria Grace C. Magno

ANALYSTS expect the Philippine-listed gaming and casino sector to see modest growth this year, fueled by online gaming expansion and steady mass-market play at physical casinos, though performance is likely to vary across operators due to regulatory challenges, rising costs, and uneven market conditions.

“Listed gaming firms are shaping up to be a tale of two segments for 2026. Online gaming remains the main growth driver, while physical casinos are expected to deliver more stable but moderate returns, anchored on mass-market play and non-gaming revenues rather than a full recovery in VIP volumes,” said F. Yap Securities analyst Marky Carunungan.

He noted that companies with diversified revenue streams, strong balance sheets, and exposure to stable tourism markets are better positioned for steady growth, while those reliant on a single customer type or regulatory framework could face greater risks.

“Online gaming continues to be a key catalyst, benefiting operators with established digital platforms such as DigiPlus Interactive Corp., although earnings visibility remains clouded by regulatory uncertainties,” Mr. Carunungan added.

Integrated resort operators, including Bloomberry Resorts Corp. and Belle Corp., are expected to benefit from gradual tourism recovery and resilient domestic mass-market play, he said.

Toby Allan C. Arce, head of sales trading at Globalinks Securities, described the sector outlook as cautiously optimistic, noting that growth will likely continue but at a more measured pace than during the post-pandemic rebound.

“Demand for gaming and resort experiences is likely to remain supported by recovering tourism, rising disposable incomes in key markets, and the appeal of entertainment-focused destinations,” Mr. Arce said.

“However, performance is expected to be uneven, reflecting differences in geographic exposure, regulatory environments, and operators’ ability to diversify revenues beyond traditional gaming.”

Analysts flagged regulatory and policy risks, heightened competition, and higher operating costs — including labor, utilities, compliance, and promotions — as key hurdles that could cap earnings growth despite improving revenues.

“Any slowdown in regional or global economic growth could weigh on discretionary spending, particularly for high-end gaming and entertainment offerings,” Mr. Arce said.

“For land-based operators, VIP and premium gaming recovery remains uncertain, while operating expenses and promotional intensity continue to pressure margins,” Mr. Carunungan added.

Last year, listed gaming and casino companies showed mixed financial results. DigiPlus Interactive posted signs of recovery in the fourth quarter after regulatory changes affected e-wallet access earlier in the year. Pacific Online Systems reported higher net income for the January-to-September period, supported by stable lottery operations through its joint venture, PinoyLotto Technologies Corp.

Bloomberry Resorts recorded a third-quarter net loss due to higher costs on its MegaFUNalo! online platform and weaker international casino performance. Belle Corp. also saw net income decline for the same period, while PhilWeb Corp. reported a net loss.

Looking ahead, analysts said sustained travel and tourism, especially in regional hubs with strong cross-border visitation, could help integrated resorts, which combine casinos with hotels, retail, dining, conventions, and entertainment, tap diverse revenue sources.

“Mass-market and premium mass segments are expected to outperform high-roller play in many markets, as operators focus on volume, stability, and lower credit risk,” Mr. Arce said. “Digitalization, loyalty programs, and data analytics will continue to enhance customer engagement and support repeat visitation, while non-gaming revenue streams will play a growing role in stabilizing earnings.”

Mr. Carunungan said the shift toward mass-market gaming, non-gaming amenities, and technology-driven customer acquisition will shape the sector’s medium-term outlook.

“Sustainability, responsible gaming initiatives, and stronger regulatory compliance frameworks are expected to become central to long-term strategy and investor perception,” he added.