Macau casino operator MGM China Holdings Ltd could see a lower dividend per share for 2026 and 2027 amid a doubling of a royalty fee percentage payable to its United States-based parent MGM Resorts International. That is according to a Monday memo from brokerage Jefferies.
Such an outcome would be in addition to a likely decline in MGM China’s 2026 and 2027 adjusted earnings before interest, taxation, depreciation, amortisation (EBITDA) and its net profit. Jefferies estimates the decline in those indicators at 6 percent and 10 percent for 2026, and 6 percent and 9 percent for 2027, “assuming all other things are equal”.
A December 23 filing from MGM China said a new branding deal involving its U.S. parent and effective from January 1, will double the percentage of MGM China’s adjusted consolidated net monthly revenues it must pay as a licensing fee to use the ‘MGM’ brand. The amount will go from 1.75 percent of such revenue to 3.5 percent.
The step has already seen Morgan Stanley downgrade MGM China’s Hong Kong-listed stock on Monday amid the changed outlook in earnings. Monday trading saw MGM China shares close 16.7 percent lower.
Jefferies stated regarding the MGM China royalties issue in its own memo on the matter: “It would also lower its [MGM China’s] absolute dividend per share for 2026/2027, should the payout ratio be maintained at 50 percent.”
Though analysts Anne Ling and Jingjue Pei added: “We believe this might offer scope for management to review its payout policy.”
Jefferies estimates the change in royalty fee arrangements for MGM China will mean it will pay its parent US$164 million for branding rights in 2026. The institution also mentioned the fact that MGM China was not alone among Macau operators in paying branding and/or licensing fees to U.S.-based parents.
The banking group put Sands China Ltd’s royalty fee payable to its parent Las Vegas Sands Corp at US$129 million for 2026, and Wynn Macau Ltd’s dues to Wynn Resorts Ltd at US$127 million.
MGM China’s rate was “at the high end of the range among its Macau peers,” but “in line with the global market range for branding/licensing,” suggested Jefferies.
MGM China’s renewed long term branding agreement with its parent has the potential to run for up to 20 years from January 1, 2026 – depending on the status of MGM China’s Macau gaming rights – according to the company’s December 23 announcement.
