TLDR
- Macau’s casino industry posted its weakest quarter since reopening in 2023.
- Citi says the FIFA World Cup and poor hold rates hurt gaming revenue.
- Second-quarter industry EBITDA is expected to fall 7% year on year to $1.923 billion.
- Galaxy Entertainment Group is expected to gain the most market share this quarter.
- Sands China is expected to see the biggest drop in market share.
Macau’s casino sector just went through its toughest quarter since the city reopened to tourists in January 2023. That’s according to new commentary from Citi, which pointed to two main problems.
The three months ending June 30 saw gross gaming revenue take a hit. Analysts blamed the FIFA World Cup and weak hold rates for the slowdown.
Citi analysts George Choi and Timothy Chau explained the situation in a recent note. They said the World Cup pulled attention away from casino gambling in Macau.
World Cup and Hold Rates Hit Revenue
The World Cup is being played across North America this year. The final match is set for July 19 in the United States.
Analysts say the tournament kept many gamblers focused on soccer instead of casino games. This shift in attention appears to have cut into Macau’s gaming business.
The second factor was poor hold rates. Hold rate refers to how much money casinos actually keep from bets placed.
When hold rates are low, casinos earn less even if betting volume stays the same. Citi said April was likely the weakest month of the quarter for VIP hold specifically.
These two factors combined to create what analysts call operating deleverage. That means costs stayed steady while revenue dropped, squeezing profits further.
Citi expects industry EBITDA to fall 7% year on year. The bank’s estimate puts the figure at $1.923 billion, the lowest level since the third quarter of 2024.
On a quarter-on-quarter basis, EBITDA is expected to drop by about 12%. Industry EBITDA margin is also expected to decline, falling by 1.5 percentage points to around 25.8%.
Recovery Expected Later This Year
Citi expects Macau’s gaming revenue to bounce back once the World Cup wraps up. The bank pointed to a full schedule of concerts and events planned for the third and fourth quarters of 2026.
This suggests the current slowdown may be tied to short-term distractions rather than a longer decline in demand. Tourism activity is expected to pick back up as the event calendar fills out.
Not every casino operator is expected to feel the pain equally. Citi said Galaxy Entertainment Group likely gained the most ground this quarter.
The bank estimates Galaxy added 1.7 percentage points in market share sequentially. That would bring its share to around 24.2%.
Galaxy also has a long-term project in the works. Phase 4 of its Macau property is expected to open in 2028, aimed at drawing high-value visitors from East and Southeast Asia.
On the other side, Sands China is expected to post the largest quarter-on-quarter EBITDA decline. Citi estimates its market share fell by 2.5 percentage points to around 27%.
The overall picture shows a market under pressure from outside forces this quarter. Whether that pressure eases will likely depend on how quickly attention returns to Macau once the World Cup final is played on July 19.
