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Macau casino operators posted stronger revenue in the fourth quarter of 2025, but gradual operating costs tied to major events and regulatory changes prevented margin expansion from reaching its full potential. According to Citigroup analysts George Choi and Timothy Chau, the NBA China Games, the 15th National Games, and SJM’s satellite casino closures all generated additional expenses that offset what otherwise would have been materially stronger operating leverage. Without those headwinds, Macau’s gaming industry margins would have expanded more noticeably despite the revenue gains being achieved.
Citigroup Maintains Positive View on Macau Gaming Sector
Citigroup forecasts Macau’s gaming industry EBITDA increased 13 percent year-on-year to approximately $2.25 billion in 4Q25, driven by an estimated 15 percent year-on-year GGR increase and 12 percent net revenue growth. However, the incremental operating expenses from hosting the NBA games and National Games events, combined with costs associated with SJM’s transition away from satellite casino operations, compressed profitability growth. The result was an industry EBITDA margin that rose only modestly to 27.5 percent in 4Q25 from 27 percent a year earlier.
Looking ahead into 2026, Citigroup maintained a constructive outlook. The bank forecasts industry GGR to climb 7 percent year-on-year while EBITDA expands 9 percent year-on-year. That suggests the special event costs and regulatory adjustments are behind the market now, clearing the way for cleaner margin progression in the coming year. Citigroup advised investors to accumulate quality gaming stocks, naming Galaxy Entertainment, Wynn Macau, and Sands China as top picks.
Market Share Reshuffled Across Major Operators
4Q25 saw meaningful market share moves among Macau’s major operators. Citigroup expects Sands China to have the biggest share of 24.5 percent, up by 0.5 percentage points quarter-on-quarter. Galaxy Entertainment gained traction, with market share seen up one percentage point to 21.7 percent on the back of concerts at Galaxy Macau and favorable VIP hold rates benefiting the operator. MGM China also grew, moving its market share to 16.4 percent thanks partly to strong VIP performance at MGM Cotai.
Wynn Macau’s share remained flat at 13.2 percent. SJM Holdings suffered the sharpest decline, to 10.5 percent, amid continuing drag from the closures of satellite casinos on the company’s system-wide footprint. Melco lost 0.9 percentage points to 13.8 percent. The dynamics illustrate how regulatory consolidation, or more specifically, satellite casino closure requirements, redistributes players and revenue in the direction of operators with stronger core properties.
Divergent Earnings Performance Among Operators
EBITDA growth rates diverged significantly across the operator cohort. Galaxy Entertainment posted the strongest year-on-year EBITDA expansion, projected at 31 percent to reach HKD$4.24 billion, approximately $544 million. That performance reflects market share gains and operational efficiency.
The Sands China EBITDA growth followed peers, growing just 8 percent year-on-year to US$616 million. Higher event-related operating costs, particularly from the NBA China Games and National Games activities hosted in its properties, compressed margin improvement despite revenue growth. The company bore a disproportionate share of the incremental hosting expenses that weighed on the overall industry.
Setting Up 2026 Without Event Headwinds
Citigroup’s outlook for 2026 assumes these temporary cost pressures ease. Without special event hosting and regulatory transition costs, clean operating leverage should flow through more directly to EBITDA growth. That narrative supports the bank’s constructive stance and recommendation to accumulate quality names ahead of what should be a more normalized earnings environment.
Source: Asia Gaming Brief (AGB)
