China tax rules put ‘question’ against Marina Bay Sands 3Q EBITDA, says JP Morgan

Third-quarter business performance of Marina Bay Sands casino resort (pictured) in Singapore had “some question” attached to it relative to “fallout from China clamping down on offshore tax collections,” says JP Morgan Securities LLC. The institution added that its US$680-million forecast for Marina Bay Sands’ third-quarter earnings before interest, taxation, depreciation and amortisation (EBITDA) is “below the Street’s [market consensus] US$693 million”. Marina Bay Sands’ second-quarter adjusted property EBITDA stood at US$689 million. The resort’s parent, Las Vegas Sands Corp, is due to report its third-quarter earnings on Wednesday, after market close. In July, the Chinese government introduced a 20-percent tax on offshore trust income, requiring unpaid taxes to be declared by this Thursday (October 22). The China tax situation has already been mentioned as a potential headwind for gambling spend in the Macau casino market, where Las Vegas Sands runs casinos via its Sands China Ltd unit. JP Morgan analysts Daniel Politzer, Samuel Nielsen and Michael Hirsh said in a Tuesday lookahead on third-quarter earnings season: “For Las Vegas Sands, positioning feels heavily negative on Macau (our third-quarter 2026 EBITDA of US$529 million is 6 percent below the Street’s), but there’s also some question on Singapore regarding fallout from China clamping down on offshore tax collections.” The institution also gave some commentary on the third-quarter gross gaming revenue (GGR) segmental data issued recently by Macau’s regulator, the Gaming Inspection and Coordination Bureau (DICJ). JP Morgan stated regarding investors’ view of Macau: “Sentiment has gone from bad to worse, as third-quarter 2026 GGR finished down 4 percent year-on-year and stuck around 85 percent of 2019 levels.” That was a reference to Macau’s pre-pandemic performance. The bank noted that in the second quarter this year, Macau GGR had been circa 83 percent of pre-pandemic level, and in the first quarter, circa 87 percent, according to official data. JP Morgan added regarding the third quarter of 2026: “Per DICJ, VIP GGR was flat year-on-year (channel checks suggest favourable hold), while mass/slot GGR was down 5 percent year-on-year.” The bank further noted of Macau: “Over the course of the third quarter, hopes for a post-[FIFA] World Cup rebound faded, and concerns grew regarding China’s crackdown on offshore wealth and trusts, and more broadly the macro environment there.” JP Morgan stated regarding Wynn Macau Ltd, another of the city’s six gaming operators: “We think expectations are also downbeat; our third-quarter Macau EBITDA of US$255 million is circa 10 percent below the Street’s US$282 million.” The institution said there were question marks regarding possible “share losses” and “unfavourable hold”. In terms of Macau GGR market share for the three months to September 30, JP Morgan estimated Sands China to be up 170 basis points quarter-on-quarter. Galaxy Entertainment Group Ltd was likely to be up 160 basis points sequentially. The bank had MGM China Holdings Ltd up 20 basis points quarter-on-quarter. JP Morgan expected to see SJM Holdings Ltd’s third-quarter GGR share to be down 80 basis points from the second quarter. Melco Resorts & Entertainment Ltd it estimated to be down 130 basis points; with Wynn Macau Ltd estimated as down 140 basis points sequentially.