A “slightly unfavourable revenue mix” in terms of Macau player segments during the second quarter – including typically lower-margin VIP gamblers – is likely to have hit industry margins on earnings before interest, taxation, depreciation, and amortisation (EBITDA) by 60 basis points, suggests Citigroup.
“On our estimates, Macau’s 8 percent GGR [gross gaming revenue] growth in second-quarter 2025 could translate into 3 percent year-on-year industry EBITDA growth,” said analysts George Choi and Timothy Chau in a Wednesday memo.
They added: “We believe the lower industry EBITDA growth versus GGR has more to do with an unfavourable revenue mix – as well-publicised concerts appealed to not only premium mass players but also direct VIP players.”
The banking group had previously suggested that a series of concerts by popular Hong Kong singer Jacky Cheung – performed at Galaxy Arena in Cotai during June and early July – had lifted Macau’s premium mass gambling performance in June, and eventually contributed to that month’s standout 19.0 percent year-on-year improvement in GGR.
The Citi team nonetheless noted in its Wednesday update: “Greater-than-expected VIP growth will likely drive industry EBITDA margin down by 60 basis points.”
“We believe it has little to do with promotional activities amongst the six operators, which we believe remain largely stable,” they added.
The bank’s team stated: “We are encouraged to see Macau generating positive growth in both GGR and potentially EBITDA.”
It added: “Players’ appetite for gaming remained strong despite geopolitical tensions and economic uncertainties, and in our view the Macau gaming sector deserves more credit from investors.”
In the three months to June 30, Macau generated just under MOP61.12 billion (US$7.56 billion) in GGR, up 8.3 percent year-on-year, and up 6.0 percent sequentially on the first quarter’s almost MOP57.66 billion.
This had the consequence of “making it the quarter with the highest GGR since reopening: on both an absolute dollar basis and a daily average basis,” at an average of “MOP672 million per day”.
Citi said MGM China Holdings Ltd had in likelihood been “the largest market-share gainer during the quarter, up 0.9 percentage points quarter-on-quarter, to 16.8 percent.”
The institution anticipated Galaxy Entertainment Group Ltd, operator of Galaxy Macau, the home of Galaxy Arena, had in the second quarter gained 0.6 percentage points sequentially, to sit on a 20.3 percent market share of GGR.
“We believe SJM [Holdings Ltd] lost the most amongst the six operators during the quarter (1.4 percentage points to 12.3 percent),” wrote the Citi analysts.
The other three operators – Melco Resorts & Entertainment Ltd; Sands China Ltd; and Wynn Macau Ltd – “likely had market share changes of less than 0.5 percentage points,” stated Citi.
