Fitch holds MGM Resorts at 'BB-' as Macau fee structure shifts
Fitch Ratings affirmed MGM Resorts International’s issuer default rating at ‘BB-‘ with a stable outlook, citing mid-5x leverage and sufficient liquidity as the company navigates uneven performance across its key markets.
The rating action reflects Fitch’s view that MGM’s financial profile remains broadly stable, supported by steady cash generation from its Las Vegas operations and a gradually firming contribution from Macau, where its subsidiary MGM China holds a gaming concession running to June 2032.
Fee structure revised upward
Running alongside the rating confirmation is a notable change to the financial relationship between MGM Resorts and MGM China. The branding fee charged by the parent to its Macau subsidiary has been increased from 1.75 percent to 3.5 percent of adjusted consolidated net monthly revenues, a measure that captures gross gaming revenue and non-gaming income after deducting promotions, discounts, and complimentary expenses.
The impact of this revision is significant in a practical sense as well, as this equates to roughly two-thirds of each fee payment being returned to MGM Resorts, creating a more significant and structured level of income from its Macau operations for MGM Resorts. The fee for MGM China is one that is tied to their revenue performance.
The level of branding fees is one that is not included in the concession agreement in Macau, which covers gaming licences and operational standards, but does not cover limits or restrictions in relation to intra-group commercial arrangements. The fee arrangement is one that is corporate in nature, within the licensed framework as opposed to being subject to it.
Macau performing, Las Vegas softer
Fitch acknowledged steadier growth from MGM China as a constructive factor in its assessment. MGM China operates two integrated resort properties in Macau, the MGM Macau on the peninsula and MGM Cotai on the Cotai Strip, and has reported improving volumes as the market continues its post-reopening normalisation.
Las Vegas, by contrast, has shown some softness. Domestic operations are still the largest contributor to revenue for MGM, but Fitch also noted the volatility in this market as part of its considerations for the credit picture. The stable outlook reflects Fitch’s view that leverage is unlikely to change substantially in either direction in the near term.
MGM Resorts reported full-year 2025 results earlier this year, with consolidated net revenues reaching levels consistent with the mid-5x leverage range Fitch referenced. The group’s liquidity position, supported by revolving credit facilities and cash on hand, was cited as adequate for its current obligations.
Concession visibility
The concession agreement of MGM China, which was part of the 2022 relicensing round in Macau, is set to end on 30 June 2032 and covers conditions around non-gaming investment and employment. The ten-year concession gives MGM Resorts a set timeframe for its capital allocation and financial planning in Macau.
The stable outlook adopted by Fitch, as opposed to a direction in either direction, is consistent with the overall trend seen in the concessionaires of Macau, with all players having their ratings unchanged as the market resets after the disruptions faced in the previous years.
MGM is also among the consortium involved in developing the proposed Osaka integrated resort in Japan, though that project remains in development and was not a material factor in Fitch’s current assessment.
Rating context
A ‘BB-‘ IDR (Issuer Default Rating) means that MGM Resorts is rated within the speculative grade category. The capital-intensive and cyclical nature of large-scale casino-based businesses justify this. The stable outlook implies that Fitch Ratings does not foresee any changes to the ratings in the near future unless there is a significant change in leverage and liquidity.
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