Operators report a more favorable environment, competition remains fierce

Macau’s gaming operators have broadly described the city’s competitive promotional environment as improving, even as competition between the six concessionaires remains fierce, according to recent earnings calls.

The issue has been a common point of discussion, with most operators noting that competition has stabilized and that efforts have increased to keep player reinvestment in check.

In a recent earnings call with analysts, Melco Resorts chairman and CEO Lawrence Ho expressed hope that all operators would continue to focus on EBITDA rather than aggressive promotions, stating, “For the healthy development of the entire market going forward, I hope that all the operators continue to do that because at Melco, our primary focus has always been on EBITDA.”

Ho said he believed Macau was now past “peak promotional intensity,” adding, “Hopefully, with the promotional environment stabilizing, we’ll continue to improve on our EBITDA margin model.”

Wynn Resorts CEO Craig Billings described the current promotional environment in Macau as “stable to slightly better… but it’s still very competitive.” He said the company continues to focus on maximizing EBITDA rather than purely on its market share.

According to an Inside Asian Gaming (IAG) report, Sands China president and CEO Grant Chum told analysts in late October that his company was carefully managing its player reinvestments at a time when it is also facing significant disruption from major upgrade works at its old Sheraton Grand hotel at The Londoner Macao.

Melco’s president and director Evan Winkler suggested it is still too early to tell if Macau’s promotional environment is trending down but reiterated the need to manage spending.

Melco has been among the main critics of Macau’s “tough comps” this year, calling out the “crazy behavior” of some rival operators, which was seen as a direct shot at MGM China’s strategy of increasing market share through additional tables and smart gaming technology. 

The Macau government has also stepped in, directing concessionaires to rein in free drink and snack giveaways, which were seen as negatively impacting the city’s small businesses.

While the promotional environment appears to be stabilizing, challenges remain. Wynn’s Billings acknowledged that the scene is still “very competitive,” and Sands China’s upgrade works are causing significant disruption. Melco’s Winkler suggested it may be too soon to determine if the promotional environment is on a long-term downward trajectory, emphasizing the need for operators to manage spending effectively. Victoria Chan