Fourth-quarter operating leverage in the Macau casino market was negatively affected by a number of cost factors, suggests Citigroup.
“If it were not for the incremental operating expenses from the NBA China Games and the 15th National Games, plus the costs related to SJM’s satellite casino closure, operating leverage for the industry in the fourth quarter would have been much greater,” wrote analysts George Choi and Timothy Chau.
They nonetheless expect Macau-market fourth-quarter earnings before interest, taxation, depreciation, and amortisation (EBITDA) to have risen 13 percent year-on-year to just under US$2.25 billion.
In terms of costs for the three months to December 31, Citi was referring first to Sands China Ltd’s staging of preseason games for the National Basketball Association (NBA) in mid-October. The casino group is to stage another round of NBA preseason games in October this year.
The second reference was to Macau’s joint hosting in November last year – with Hong Kong and Guangdong province on the Chinese mainland – of the 15th National Games of the People’s Republic of China. Aside from the six Macau casino concessionaires pledging funds to support the National Games, some of them also provided facilities to host certain sport categories that were contested in Macau.
Citi stated: “Although Sands China gained 0.5-percentage-point market share quarter-on-quarter, we forecast its fourth-quarter EBITDA to increase only 8 percent year-on-year to US$616 million (-5 percent below consensus), with EBITDA margin anticipated to fall 1.9 percentage points year-on-year, mainly reflecting the incremental operating expenses arising from the NBA China Games in October and the 15th National Games in November.”
The other Citi reference on fourth-quarter cost pressures was to the closure in the second half of 2025 of a portfolio of Macau satellite casinos that were relying on the gaming rights of SJM Holdings Ltd, and the absorption of circa 4,000 former satellite workers into the firm’s core business.
Citi added in its outlook note on the coming fourth-quarter earnings season for the Macau industry: “It looks like SJM lost the most market share during the quarter (from 11.8 percent in the third quarter to 10.5 percent … mostly reflecting the closure of the satellite casinos (and to a lesser extent, market share loss at Grand Lisboa Palace).”
Banking group JP Morgan had said in a Thursday note: “There could be more downside than upside risk to our fourth-quarter forecast, given likely higher-than-expected operating expenses spend for its inaugural NBA pre-season games (Sands-specific) and the 15th National Games (industry-wide) during the quarter.”
GGR market share
In terms of fourth-quarter market share in terms of gross gaming revenue (GGR), Citi suggested Galaxy Entertainment Group Ltd and MGM China Holdings Ltd were likely to be the two operators with the “largest quarter-on-quarter market share improvements”.
“We believe Galaxy benefitted from the concerts it hosted at Galaxy Macau and some favourable VIP hold rates during the quarter, translating into a 1.0-percentage point market share increase, from 20.7 percent in the third quarter, to 21.7 percent in the fourth quarter,” said Citi.
In a recent statement, Galaxy Entertainment mentioned it had hosted 212 shows and sports events in 2025.
Citi said in its latest update on fourth-quarter trading market wide: “We anticipate MGM China’s market share increasing from 15.5 percent in the third quarter to an estimated 16.4 percent in the fourth quarter: with some favourable VIP hold at MGM Cotai.”
Citi stated that it expects Galaxy Entertainment to have “the greatest year-on-year EBITDA improvement” in the fourth quarter, up 31 percent year-on-year to nearly HKD4.24 billion (US$543.9 million).
EBITDA margin for the casino firm “should improve by an estimated 2.2 percentage points year-on-year, on our estimates,” the institution added.
