Banking institution Citigroup expects first-quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) for Macau’s gaming industry to decline by 6 percent year-on-year, on what it said was “incremental opex [operating expenses] from new supply” in the market.
Macau’s gross gaming revenue (GGR) growth was flattish in the first quarter of 2025, “in both year-on-year and quarter-on-quarter terms”.
Casino GGR in Macau stood at MOP57.66 billion (US$7.22 billion) in the first three months this year, up 0.6 percent from a year ago and a 0.4-percent increase sequentially, according to official data.
“Although player reinvestments seem to remain at reasonable levels, we believe industry opex increased in the quarter due to incremental costs associated with new supply launched, especially at Sands [China’s] Londoner Grand [hotel],” wrote Citi analysts George Choi and Timothy Chau in a Thursday memo.
“Also, a few operators seem to have suffered from less favourable hold,” observed the analysts.
“We anticipate that the resulting operating deleverage will likely drive first-quarter 2025 industry EBITDA down by 6 percent year-on-year” to nearly US$1.92 billion, stated the Citi team. It expects first-quarter EBITDA margin in Macau to be “at circa 26 percent”, down from 28 percent a year earlier.
“The year-on-year base was high as renovation work at [The] Londoner was in the early stage and Bruno Mars staged a concert in Macau in first-quarter 2024,” stated the analysts. “Sands [China] introduced 700 new suites at Londoner Grand right before Chinese New Year 2025, but it seems associated incremental opex was not met by higher market GGR or market-share gain.”
The analysts also said their current forecasts for the Macau market did “not bake in a hit” to the number of visitor arrivals and casino GGR “from a scenario in which rising U.S. trade tariffs impact China and Asian economies – and result in fewer number of visitors to Macau or their gaming budgets”.
“However, this is an emerging downside risk factor that we will monitor,” they added.
On Thursday, President Donald Trump raised to a minimum of 145 percent, the U.S. tariff on imports from China. Beijing had earlier in the day raised its own tariffs on U.S. goods to 84 percent.
