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