Investment bank Citigroup believes the 8% year-on-year growth in gaming revenues generated by Macau’s casino operators in the June quarter will translate to 3% industry EBITDA growth – somewhat tempered by an unfavorable revenue mix due to a rebound in VIP play.
In a note, Citi’s George Choi and Timothy Chau observed that the MOP$61.1 billion in GGR generated in 2Q25 was the highest revenue generated since COVID both on an absolute dollar and a daily run-rate basis.
As such, EBITDA is expected to have climbed 3% to around US$2.05 billion. The lower EBITDA growth when compared to GGR is, Citi said, due to greater-than-expected VIP growth that will likely drive margins down. The analysts pointed out that recent high-profile concerts in Macau attracted premium mass players but also direct VIP customers, contributing to the weaker revenue mix.
“The slightly unfavorable revenue mix will likely lead to a minor reduction in industry EBITDA margin – on our estimates down 60bps to 27.3%,” Citi wrote. “We believe it has little to do with promotional activities amongst the six operators, which we believe remain largely stable.”
Nevertheless, “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.”
On market share estimates for the second quarter, MGM China is again seen as a benefactor with share seen rising by 0.9 percentage points to 16.8% and Galaxy by 0.6 percentage points to 20.3%. SJM may have lost share, dropping back to around 12.3%.
Conversely, Citi sees Melco Resorts and Galaxy as the largest EBITDA gainers, with Melco’s Adjusted Property EBITDA expected to have increased by around 12% year-on-year to US$338 million.
Operators will start releasing their 2Q25 financial results towards the end of July.
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