Key Highlights

  • Group-wide adjusted property EBITDA was approximately $304 million, or $312 million adjusted for VIP hold, with Revenue of $1.3 billion matching the $1.3 billion estimate.
  • An unfavorable VIP win rate of 2.7 percent, down from 3.9 percent a year earlier, reduced property EBITDA at City of Dreams Macau by approximately $9 million.
  • City of Dreams Mediterranean and satellite casinos in Cyprus grew property EBITDA 60 percent year over year despite disruption from Middle East conflict, while City of Dreams Manila EBITDA rose 9 percent.
  • The company pushed its planned Dividend resumption from late 2026 to sometime in 2027, having repurchased approximately 25 million ADSs for roughly $134 million so far this year.

World Cup Sports Betting Drew Gaming Wallet Away From Macau

Melco Resorts & Entertainment Limited (NASDAQ:MLCO), an operator of integrated casino resorts across Macau, the Philippines, Cyprus, and Sri Lanka, reported group-wide adjusted property EBITDA of approximately $304 million for the second quarter, or $312 million when adjusted for VIP win rate variance, as lower-than-expected visitation and softer gaming volumes pressured margins. Management attributed a meaningful portion of the softness to the FIFA World Cup, which executives said pulled a larger share of customer gaming wallet toward sports betting activity than in prior World Cup years, with some reduction in subsequent play among affected customers even after the tournament concluded.

The VIP segment bore the brunt of the disruption, with City of Dreams Macau's VIP win rate falling to 2.7 percent from 3.9 percent in the prior-year quarter, reducing property EBITDA by approximately $9 million on an unfavorable hold basis alone. Management indicated activity had reverted to normal levels by late July and early August as customers returned to their typical playing patterns following the conclusion of the tournament.

International Portfolio Delivers Broad-Based Growth Despite Regional Disruption

Outside of Macau, the company's diversified international portfolio showed resilience. City of Dreams Manila delivered property EBITDA of $31 million, up 9 percent year over year, while City of Dreams Mediterranean and its satellite casinos in Cyprus grew property EBITDA 60 percent year over year despite ongoing disruption tied to conflict in the Middle East. In Sri Lanka, the company's newer casino operation recorded positive EBITDA of $3.5 million as that Business continues its ramp-up phase.

Management characterized the Cyprus growth as particularly notable given the operating environment, crediting continued progress in developing that market and refining the company's approach to attracting customers from India, a segment executives described as still in an early learning phase. The company maintained daily operating expenses in Macau at approximately $3.4 million per day inclusive of its House of Dancing Water production, in line with prior guidance, even as it prepares to absorb costs associated with the ramp-up of its new REM entertainment attraction.

Capital Allocation Prioritizes Buybacks and Debt Management Over Dividends

The company pushed back its planned dividend resumption from previously discussed timing near the end of 2026 to sometime in 2027, having redirected Capital instead toward share repurchases when management judged the stock price to be significantly discounted relative to intrinsic value. Melco repurchased approximately 22.4 million ADSs for roughly $121 million between April 1 and August 12 alone, bringing total 2026 repurchases to approximately 25 million ADSs for about $134 million.

On the balance sheet, the company extended and upsized its revolving Credit Facility to $2.8 billion with a new Maturity of June 2031, up from a prior April 2027 maturity, while Studio City completed a $300 million senior secured bond issuance and redeemed higher-cost notes, actions management said reduce refinancing risk and interest expense ahead of upcoming maturities. Consolidated cash on hand stood at approximately $1 billion at quarter-end, with total available Liquidity of approximately $2.8 billion.

Retail Renovation and REM Opening Set Up a Transitional Second Half

Management said the company expects continued construction disruption at City of Dreams Macau as it proceeds with a retail area renovation intended to unify the property's luxury retail offering into a single continuous loop, with that work expected to run through roughly the middle of 2027 and carry some near-term guest experience impact despite mitigation efforts. The newly opened REM attraction, soft-launched ahead of a planned grand opening after Golden Week in October, is expected to complement the property's existing five-star hotel offerings, though the associated ramp-up costs will weigh on near-term OpEx even as management maintains its $3.3 million to $3.4 million daily OpEx guidance for Macau. Full-year Capital Expenditure guidance across the group stands at approximately $225 million, with 2027 CapEx expected to decline to a range of $275 million to $300 million, and the durability of the recovery from the World Cup-related disruption alongside continued Cyprus and Manila growth will likely shape whether the company can sustain positive momentum into the more heavily promoted entertainment calendar planned for the back half of the year.