Casinos experience toughest quarter since reopening

Macau’s casino industry posted its weakest quarter since reopening after the pandemic, with Citigroup citing the FIFA World Cup and poor gaming hold rates as key drags on performance.

In a note Friday, Citi said industry earnings before interest, taxation, depreciation, and amortization (EBITDA) are forecast to fall 7% year-on-year to USD1.92 billion in the second quarter of 2026, the lowest level since the third quarter of 2024.

Citi analysts George Choi and Timothy Chau described the period as “arguably Macau’s toughest quarter since reopening” in January 2023, when cross-border travel resumed after pandemic restrictions.

They said, in their note, that the downturn was driven by a diversion of consumer spending toward the FIFA World Cup, which began in mid-June, as well as “some extremely unfavorable hold rates” in VIP gaming.

Gross gaming revenue (GGR) totaled MOP61.03 billion ($7.6 billion), flat from a year earlier but down 7% from the previous quarter.

Hold rates were particularly weak in April, Citi said. The institution also said that “significantly unfavorable VIP hold, particularly in April,” led to operating deleverage, squeezing margins across the industry.

On performance, Macau’s six casino operators showed varied results, according to the institution.

Citi expects Galaxy Entertainment Group to post the largest market share gain, with its EBITDA share rising 1.7 percentage points to about 24.2%. The bank pointed to Galaxy’s ongoing expansion, including Phase 4 of its Cotai flagship, as strengthening its appeal to higher-value customers from East and Southeast Asia.

MGM China and SJM Holdings were also projected to record modest gains. Citi highlighted that MGM China benefited from newly opened hotel suites and its Masters Club VIP gaming area at MGM Cotai, while SJM’s Peninsula properties were seen as less affected by weak hold rates.

By contrast, Sands China is expected to record the steepest decline, with its market share falling 2.5 percentage points quarter-on-quarter to around 27%. Citi attributed much of this drop to unfavorable VIP hold conditions.

Despite the weak quarter, Citi said negative factors have largely been priced in, noting that the sector is trading at 7.1 times forward EBITDA, well below historical averages.

Looking forward, the bank struck a more optimistic tone for the rest of the year, citing a “star-studded concert and event calendar” in Macau for the second half of 2026.

The World Cup final is scheduled for July 19 in the United States. Following that date, analysts expect consumer attention to shift back to travel and entertainment spending. It is anticipated that gaming revenue “should swiftly return to normal soon after the tournament ends,” Citi said.