Casinos see whale betting surge amid profit margin concerns

Citigroup’s January table survey shows a 72.3% year-over-year surge in betting volume by “multiple huge whales” across Macau’s casinos. The findings come even as JP Morgan analysts warn of shrinking profit margins despite robust gross gaming revenue (GGR) growth.

Citi’s survey, conducted across the major operators, spotted 28 whales –  up 16.7% from the 24 observed during the same period last January.

Whales were observed wagering a total of HKD8.1 million, nearly double the HKD4.7 million recorded a year earlier. Average wagers per whale jumped 49% to HKD290,000, with six players betting HKD500,000 or more during Citi’s checks.

Premium mass betting also rose 25% year-over-year to HKD16 million across 564 players, though the player count fell 11%; average bets climbed 41% to HKD28,424, matching 2025 Golden Week peaks.

Citi analysts George Choi and Timothy Chau attributed the January surge to Macau’s appeal for affluent mainland Chinese, including promotions tied to concerts by Blackpink, Raymond Lam, and Dylan Wang. The analysts remarked, “We think it’s safe to say that Macau does have gaming and non-gaming product offerings that appeal to affluent mainland Chinese consumers, who remain willing to spend.”

Galaxy Entertainment Group’s Horizon Room claimed Citi’s “Player of the Month” title with a HKD1 million bet, while honorable mentions went to an HKD850,000 wager at Melco Resorts’ City of Dreams and HKD640,000 at Wynn Palace’s Chairman’s Club.

Galaxy led with 25% market share, followed closely by Melco (20.9%), Wynn (20.3%), and Sands China (20.2%).

JP Morgan reduces profit forecasts

JP Morgan analysts lowered their 2026 EBITDA forecasts for Macau’s six casino operators by 3% to 4% on average Friday, citing weaker profit growth despite robust GGR.

analysts D.S. Kim, Selina Li, and Lindsey Qian highlighted a rising VIP baccarat mix that reached 16% of total GGR in the fourth quarter of 2025, up from 12% in 2024. That shift eroded margins compared to higher-yield mass market play.

GGR grew 9% last year, beating the firm’s initial 5% estimate. VIP rose 25% to 30% and mass 6% to 7%. Yet earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed only 6% unadjusted, or 1% to 2% excluding VIP luck. That fell short of the expected 4% as operating expenses jumped 7% from non-gaming events like concerts.

“OPEX ran fast at an estimated +7% in FY25, versus the typical +3% inflation. Partly volume-driven, but spikes in non-gaming pushed OPEX higher; a chicken-and-egg setup where events lifted GGR but also weighed on margins given weaker flow-through,” the firm notes.

The institution downgraded SJM Holdings to Underweight from Neutral and Melco Resorts to Neutral from Overweight. It cited decelerating gross gaming revenue growth into 2026 and fading confidence in a profit upcycle. Margins slipped to 23.3% from 23.7% with no operating leverage amid premium mass shifts and reinvestments.