Macao’s casino operators are painting a complicated picture as first-quarter earnings roll in. Galaxy Entertainment is showing year-on-year growth that masks softer sequential performance, while SJM Holdings posts a concerning 21% revenue decline.

Galaxy’s Growth Masks Quarter-on-Quarter Weakness

Galaxy Entertainment Group reported net revenues of just under $1.6 billion in Q1, representing an 11% increase year-on-year. On the surface, that’s solid growth. But dig into the detail and the story becomes more nuanced.

Quarter-on-quarter, revenues actually dropped 10%, with gross gaming revenue down 9% compared to the final quarter of 2025. The firm did see year-on-year gains across mass gaming, VIP room, and slots operations. However, all three segments retreated in the quarter just gone. VIP revenue proved particularly weak, declining 25% since the start of the calendar year.

It’s a reminder that while annual comparisons can look encouraging, the underlying momentum matters just as much to investors. Actually, it might matter more.

On the positive side, Galaxy maintains a strong balance sheet. Pre-audit cash and liquid investments totalled around $4.7 billion against net liabilities of $345 million. The operator is pushing ahead with significant capital projects, including new dining, leisure, and retail facilities at Galaxy Macau alongside a fresh 1,350-room hotel. A major renovation of StarWorld Hotel on the peninsula is also underway, with two casino floors being remodeled and work expected to complete by early 2027.

SJM Holdings Under Pressure

The picture at SJM Holdings is noticeably darker. The Lisbon brand operator reported Q1 net revenues of $754 million, down 21.1% year-on-year, with gross gambling revenue falling nearly 19%. The operator swung from a $4 million profit to an $8 million loss, and its share of Macao’s total casino revenue contracted by 3.9 percentage points to just under 10%.

Those are the sorts of numbers that make investors nervous. For a legacy operator with deep roots in the territory, a revenue decline of that magnitude raises real questions about competitive positioning and player preference.

Broader Market Sentiment

The weakness in Macao comes as gaming stocks globally are struggling despite the broader market’s strength. Popular gambling-focused exchange-traded funds have dropped over 3% even as the S&P 500 hit new record highs, driven by technology enthusiasm.

In Hong Kong, MGM China shares fell 1.6% in May while Wynn Macau slipped 0.7%. MGM China did manage 10% year-on-year revenue growth in Q1, though it also saw VIP spending decline, suggesting the softness in premium gaming is an industry-wide trend rather than isolated to any single operator.