Good Morning. Higher costs, worse outlook. MGM China’s higher, market-based licensing fees covering MGM-branded operations across Greater China prompted Morgan Stanley to downgrade the stock on expected earnings and margin pressure, while the investment bank remained positive on Macau’s gaming outlook and favoured Galaxy and Sands China over MGM and Wynn. Meanwhile, Hong Kong-listed Palasino Holdings has opened its latest property, Palasino Mikulov, in the Czech Republic, marking a significant milestone in its Central European expansion, with a soft launch on December 18 and a grand opening planned for early 2026.
What you need to know
- Analysts at Morgan Stanley question MGM China’s significant increase in royalty payments, which will bite into EBITDA.
- Hong Kong-listed Palasino Holdings announced it has opened its newest property, Palasino Mikulov, in the Czech Republic.
On the radar
- PH Resorts to be reclassified as Hotel & Leisure on PH Stock Exchange.
- Melco to operate 3 Mocha slot clubs via management co. starting Jan.
- Suntrust reshuffles board with two new director appointments.
- Macau tourism remains strong, with 1.14 million holiday arrivals.
AGB Intelligence
MACAU
Analysts flag impact of higher MGM China brand royalties
MGM China’s higher, market-aligned license fees — of which about two-thirds will go to MGM Resorts and which apply across Greater China — led Morgan Stanley to downgrade the stock on expected margin pressure, while the bank favoured Galaxy and Sands China despite remaining broadly positive on Macau’s double-digit gaming growth outlook. MGM China plans to adjust annual license fee caps after 2026 based on anticipated business growth, justifying the increase by aligning it with market standards and claiming fairness for shareholders, while 66.6% of the fees will benefit MGM Resorts.
Industry Updates
- Affigates debuts its new ecosystem at iGB Affiliate Barcelona 2026.
- TxODDS reports 31 billion odds updates spanning 193 countries in 2025.
- Sands China strengthens responsible gaming strategy in 2025.
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