MGM China Q1 2026 Profit Growth Rose 9.2%, Drained by Branding Costs
MGM China posted higher first-quarter 2026 revenue, supported by stronger mass-market gaming, although profitability came under pressure from higher costs. The Macau casino operator said net revenue rose 9.2% year-on-year to just over US$1.12 billion for the 3 months ended March 31.
Revenue Growth
The results, released Wednesday by parent MGM Resorts International, showed continued strength in the company’s Macau operations. MGM China runs MGM Macau on the Macau peninsula and MGM Cotai in the city’s Cotai district.
Gaming revenue for the quarter reached US$977 million, up 9.0% from a year earlier. Main floor table games win rose 18.0% year-on-year to nearly US$1.08 billion, which the company said reflected continued strength in the premium-mass and base-mass segments. Main floor table drop also increased, rising 9.5% year-on-year to US$3.97 billion.
MGM China said its daily total gross gaming revenue grew 13% year-on-year in the quarter. Daily mass gross gaming revenue, including slot machines, surged 19% to an historical high, according to the company’s separate press release.
Margin Pressure
Despite the stronger top line, earnings were slightly lower. Adjusted earnings before interest, taxation, depreciation, amortisation, and rent for the Macau unit came in at nearly US$273.5 million, down 4.2% from a year earlier.
The decline was driven by higher expenses, including increased branding-related fees paid to the parent company. Intercompany branding licence fee expense in the opening quarter of 2026 was US$41 million, compared with US$18 million in the same period last year.
This was the first quarter to reflect the new long-term branding agreement between MGM Resorts and MGM China. The new fee structure, which took effect on January 1, doubled the percentage of adjusted consolidated net monthly revenues paid for use of the MGM brand from 1.75% to 3.5%.
Following the fee hike, Morgan Stanley lowered its MGM China EBITDA forecasts for 2026 and 2027 by 7% each, factoring in higher royalty costs. Jefferies also stated that MGM China may face lower dividends per share in both 2026 and 2027, though it may re-evaluate its payout ratio.
Property Performance
On a property basis, MGM Cotai recorded revenue of HKD5.33 billion in the quarter, up 10.1% year-on-year. Adjusted EBITDA increased 11.0% to HKD1.63 billion on the back of the property’s performance during the quarter.
In MGM Macau, revenue was reported at HKD3.44 billion against HKD3.15 billion for the corresponding period in the previous year. Nonetheless, adjusted EBITDA declined 7.9% year-on-year to HKD831.5 million amid a less-profitable performance despite the rise in revenues.
On the whole, MGM China noted that its gross gaming revenue market share came in at 15.4% in the first quarter of 2026 compared to 15.7% in the previous year. These statistics reflect an uneven quarter wherein there is a growth in revenue and a declining market share and margins.
Parent Company Results
MGM Resorts also reported its own first-quarter numbers on Wednesday. Consolidated net revenues came in at US$4.45 billion, up 4.2% from a year earlier. Net income fell 15.8% to US$125.1 million.
The parent company’s expenses rose 7.3% year-on-year to US$4.16 billion. That increase in costs added another layer to the quarterly picture, as the group navigated stronger revenue growth alongside higher spending.
MGM China’s latest figures show a business that is still growing on the revenue side, but one now facing a heavier cost base. The impact of the new branding agreement was visible in the quarter’s profit trend, even as gaming performance remained solid across its Macau portfolio.
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Source: GGR Asia
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