MGM Resorts Receives Stable Rating from Fitch Amidst Regional Disparities

Fitch Ratings has affirmed MGM Resorts International’s Issuer Default Rating at ‘BB-’ with a stable outlook, highlighting the company’s robust financial position despite challenges in the Las Vegas market. The rating reflects MGM’s scale, diversification, and strong competitive position, particularly its growing presence in Macau and plans for expansion in Japan.

Fitch’s Ratings Update: Key Factors

Fitch’s affirmation of MGM Resorts and its subsidiaries’ ratings at ‘BB-’ underscores the company’s mid-5x EBITDAR leverage, conservative financial policies, and strong liquidity. These strengths are considered to outweigh the speculative nature of the rating. Fitch Ratings noted the company’s ability to fund growth opportunities with its current liquidity.

Macau Drives Earnings Growth

Macau remains a critical driver of MGM Resorts’ earnings. MGM China Holdings, in which MGM Resorts holds a 56% stake, reported adjusted EBITDAR of US$1.20 billion in 2025, a 10.7% increase from 2024. GGRAsia reports that a new long-term branding agreement, effective January 1, 2026, has increased the licensing fee paid by MGM China for the use of the MGM brand from 1.75% to 3.5% of adjusted consolidated net monthly revenues, providing MGM Resorts with more stable cash flows.

Fitch expects more stable growth in Macau compared to the post-pandemic recovery phase, allowing MGM China to deliver consistent cash flow to its parent company through distributions and branding fees.

Las Vegas Faces Headwinds

While Macau demonstrates strength, MGM Resorts is experiencing headwinds in Las Vegas. Fitch noted a decline in visitor numbers and hotel revenues in 2025, a trend expected to continue into 2026, due to fewer international visitors, changing event calendars, and perceptions of higher prices. ASGam highlights that these trends are slowing overall growth, with the company reporting adjusted EBITDAR of US$2.43 billion in 2025, a modest 0.6% increase year-over-year.

Japan Expansion and Future Outlook

MGM Resorts is too developing the JPY1.51-trillion (approximately US$9.49 billion) MGM Osaka integrated resort in Japan, scheduled to open in late 2030. This project, undertaken with partners, represents a significant long-term investment.

Fitch identifies potential risks including rising fuel prices, volatility in VIP gaming, and execution risks associated with the Osaka development. Delays or cost overruns in the Osaka project could negatively impact the company’s leverage.

Implications for Investors

The stable outlook from Fitch Ratings provides a degree of reassurance for investors. The company’s diversified portfolio, with a strong foothold in Asia, reduces reliance on the US market. MGM’s conservative financial policies and robust liquidity position create it an attractive option for risk-conscious investors, particularly in a high-interest rate environment. FocusGN notes that the new branding agreement secures cash flows, which is relevant for dividend-focused investors.

Sector Trends and Considerations

The gaming sector is undergoing a transformation driven by digitalization and expansion in Asian markets. MGM Resorts is balancing its traditional resort operations with a growing digital business. Key metrics for evaluating the company’s performance include EBITDAR leverage and occupancy rates.