Increased post-pandemic competition between Macau’s concessionaires continues to hinder any meaningful margin improvement, negating any positive impact that may have resulted from the decline of the city’s junkets, according to Lawrence Ho, the Chairman and CEO of Melco Resorts & Entertainment.
Ho addressed the issue of margins and the competitive Macau promotional environment during the company’s 3Q25 earnings call late last week after the company reported hold-adjusted margin at its Macau resorts of 27.6% – improved from 24.8% a year earlier but slightly down on Q2.
The company also revealed they had not yet seen any reason to adjust upwards theoretical hold on rolling baccarat despite having completed rollout of smart gaming tables in March.
On the issue of margins, Ho said that although competition in Macau has stabilized, it remains intense, and he doubled down on past comments aimed at the aggressive tactics used by some competitors in recent years.
“I think clearly, when the VIP and the junket business went away, we had all hoped that margins would just rocket, go sky high,” he said.
“Unfortunately, that hasn’t happened. I think it’s well documented what some of our competitors have done.
“Theoretically, if all six concessioners can get their acts together, there should be margin expansion given the market is growing.
“On one hand … I think we’re past peak competitiveness in terms of the intensity in the market. At the same time, I think everybody is still thinking of ways to try to steal business and grab share.”
Ho added that with industry analysts obsessed with market share, he did not blame competitors for “constantly focusing on that rather than being more focused on EBITDA”.
“I think [reinvestment] is as rational as it has been in the last maybe 12 to 18 months [but] I am pleading with our competitors and also sell-side research analysts to maybe place less emphasis on weekly, monthly market shares so that people do not feel like they are pressured to chase market share.”
Evan Winkler, President and Managing Director of Melco parent Melco International Development, said that the company did not plan to be guided by the actions of its market rivals – particularly in the wake of recent comments by Sands China that it was becoming more aggressive.
Melco, Winkler explained, would approach player reinvestment “by program, by player segment … evaluating constantly what we’re doing.”
The company did not see any significant shift upwards in spending in Q3 but would continue to monitor and respond to the competitive environment, he added.
“[Macau] is very competitive, but at least right now it’s not irrationally competitive,” he explained.
The Melco executive team was also asked for any insights they have gained from the rollout of smart tables across their Macau resorts – particularly in the wake of changes introduced by Las Vegas Sands (LVS) to their theoretical hold rate at its Singapore resort Marina Bay Sands. Having now enjoyed a full year of smart table implementation, LVS revealed last month that it was adopting a new methodology for calculating expected hold rates on rolling baccarat after seeing expected hold at MBS hit a new high of 4.2% in the September 2025 quarter.
LVS said it had not yet followed a similar path in Macau – a stance Melco agrees with for now.
“We have a target of 3% [on the rolling business],” Winkler said during last week’s earnings call. “Based on what we’re looking at from a data standpoint – and we continue to watch it – that number sitting here today is still a good number in terms of that business constituency and in terms of the betting mix of those players.
“I understand this varies some market by market and there’s some noise about other markets raising [theoretical hold] up substantially but [as of] today we haven’t yet seen a strong enough basis for us to adjust.”
