Morgan Stanley expects continued pressure on the Philippines’ land-based casino sector through 2026, citing declining tourism, softer returns, and increasing competition from online gambling.
According to Praveen Choudhary, Managing Director and Head of Asian Gaming and Lodging at Morgan Stanley, the market has experienced a notable decline from its previously high-profit levels.
Falling Tourist Arrivals Weigh on Casino Performance
A major contributor to sector weakness remains reduced visitation from key source markets, particularly:
- South Korea
- China
Despite eased visa requirements for Chinese tourists, visitor numbers from both countries fell by double digits in early 2026, significantly affecting casino traffic.
As a result, reduced international footfall continues to pressure land-based gaming revenues.
Official Revenue Data Highlights Sector Decline
The Philippines’ licensed land-based casinos generated PHP182.5 billion (approximately US$2.97 billion) in gross gaming revenue during 2025, representing a 9.6% year-on-year decline.
This downturn reflects broader structural challenges, including:
- Weaker inbound tourism
- Growing online betting competition
- Changing regional consumer behaviour
Online Betting Emerges as Competitive Threat
Moreover, the rise of digital gambling alternatives is increasingly shifting consumer engagement away from traditional casino properties.
This transition adds further strain to brick-and-mortar operators already dealing with softer international demand.
Broader Asian Gaming Market Shows Mixed Recovery
While the Philippine market faces headwinds, Morgan Stanley highlighted stronger recovery trends in other regional markets:
- Macau continues to recover, with VIP gaming outperforming mass-market growth
- United Arab Emirates remains an attractive emerging market through developments such as Wynn Al Marjan Island
- Japan faces slower-than-expected integrated resort expansion timelines
This contrast underscores an increasingly uneven recovery across Asia’s gaming landscape.
Outlook for 2026 Remains Cautious
Choudhary indicated that there is little evidence suggesting a near-term turnaround for the Philippine casino market, with structural and external challenges likely to persist.
Market Evolution Requires Strategic Adaptation
Overall, Morgan Stanley’s outlook suggests that Philippine land-based operators may need to adapt through stronger diversification, digital integration, and evolving tourism strategies to remain competitive.
As regional gaming markets continue to shift, the Philippines faces mounting pressure to modernize its casino sector while navigating both international tourism volatility and the rapid expansion of online gaming.
