Fitch forecasts SJM retaining 50% of closed casino market share despite debt woes

SJM Holdings Ltd. is expected to hold onto at least half the market share from its shuttered satellite casinos through resource shifts and marketing gains in late 2025, Fitch Ratings projected.

Yet Moody’s deems a credit upgrade unlikely, citing a negative outlook and rising debt burdens.

The assessments came after SJM proposed issuing new notes to manage its indebtedness. SJM ran nine of 11 satellites at the start of 2025; 10 have since shuttered, leaving L’Arc as a fully acquired property by SJM in late December.

From its closed satellites, SJM redirected assets – 458 tables and more than 4,000 staff – to self-owned venues like Casino L’Arc Macau and Casino Lisboa’s expanded floor, Fitch reported.

“Management believes SJM’s ability to retain satellite market share improved in 4Q25, following a sharp decline in 3Q25, with the hiring of marketing personnel and agreements with satellite operators,” the agency stated.

Fitch’s base case predicts SJM retaining half the lost share via these tables’ proximity and positioning. “These tables should generate higher margins than the previous satellite operations, leading to EBITDA accretion,” analysts wrote. “The impact on SJM’s credit profile will depend on its ability to recapture the market share of the outgoing satellite casinos, in addition to retaining L’Arc’s existing business.”

Q3 slump exposes liabilities

Third-quarter 2025 gross gaming revenue at SJM dropped 5% year-over-year, with self-owned casinos up 1% but satellites plunging 15%. This lagged the industry’s 12.5% gain, pressured by rivals’ promotions, concerts, events, and hotel openings, noted Fitch.

Overall market share fell 2.1 percentage points to 11.8%, self-owned to 7.9% (down 0.9 points) and satellites to 3.9% (down 1.2 points).

In response, Fitch pegged SJM’s business profile as weaker than U.S. peers Wynn Resorts, MGM Resorts International, and Las Vegas Sands, due to “concentration in the competitive Macau market” and its “weaker portfolio of assets within that market.”

Struggles at Grand Lisboa Palace

At flagship Cotai site Grand Lisboa Palace, Fitch flagged a “lackluster 3Q25,” with non-rolling GGR growth slowing to 1% quarter-over-quarter and 12% year-over-year. “The company is continuing its work on improving GLP’s mass appeal through better connectivity, food and beverage, and retail and event offerings, but the effectiveness of these measures in increasing market share remains uncertain,” Fitch noted.

Moody’s flags debt surge

In response to SJM’s soft Q3 earnings and the debt-financed L’Arc acquisition, Moody’s projects SJM’s adjusted debt-to-EBITDA ratio rising to 8.3–8.7 times in 2025, up from 7.4 times for the 12 months ended June 30, 2025.

“We expect the financial leverage ratio to improve visibly to about 6.0 times in 2026, driven by higher EBITDA and a modest debt reduction,” Moody’s stated.

“Higher earnings will be mainly supported by the reallocation of satellite casino tables to SJM’s self-owned properties and the newly acquired L’Arc Hotel,” Moody’s noted. It added, “Other contributing factors include continued growth in gaming revenue, further ramp-up of Grand Lisboa Palace, and normalization of win rates.”