Macau’s Gaming EBITDA Faces Decline
In the second quarter of 2026, Macau’s gaming sector reported its most challenging period since the border reopening. Citigroup projects EBITDA will decrease by 7% year-on-year to $1.92 billion, impacted by both the FIFA World Cup and challenging hold rates. Gross gaming revenue is flat compared to the previous year but shows a 7% sequential drop, marking the lowest figures since early 2025.
Impact of External Factors and Financial Pressure
Analysts George Choi and Timothy Chau highlight that the mid-June onset of the FIFA World Cup and unfavorable VIP hold rates, especially in April, were primary contributors to the downturn. These factors resulted in significant operating deleverage, squeezing margins to around 25.8%.
Market Performance and Future Prospects
Despite these challenges, the sector is believed to have absorbed the negative impacts. With dynamic events planned for late 2026, Macau’s gross gaming revenue is expected to stabilize soon after the World Cup concludes. MGM Cotai and SJM are anticipated to see significant market share growth, helped by new developments at MGM Cotai and improved performance at Peninsula casinos.
Shifts Among Leading Operators
While MGM China and SJM are set for gains, Sands China experienced a notable decline in market share from 26.1% to 24.2%, largely due to adverse VIP hold rates. Conversely, Citigroup has placed an upside catalyst watch on Galaxy Entertainment, projecting it as a major EBITDA gainer for the quarter.
Investment Insights and Sector Outlook
Citigroup’s revised outlook includes a reduction in target prices by 7% to 22% across the board, with a heightened market risk premium. Investors are advised to consider building positions in Galaxy and Wynn Macau, the latter offering an attractive dividend yield of 8%.