Jefferies Flags Macau Q1 Margin Compression as Star's NSW Suspension Extends Through September.

The most-cited line of the note: SJM Holdings, the worst Q1 GGR performer of the six (-21.1% revenue is now a near-certainty), is positioned as the only structural margin expander. Jefferies forecasts SJM adjusted EBITDA growth of 13%, 14% and 8% in 2026, 2027 and 2028 respectively, with margins rising from 14% to 16% over the same window. The mechanism is the satellite-casino cleanup: the 18 venues shuttered in December were structurally low-margin and their removal liberates floor space, marketing budget and management bandwidth for Grand Lisboa Palace and the core self-operated estate. The thesis is unfashionable — SJM has been the consensus short for two years — but the math works if Grand Lisboa Palace can find its footing.

Star Entertainment confirmed on April 1 that it had elected not to seek a NSW casino licence determination in March, and instead submitted a "pathway to suitability" submission requesting more time. The NSW Independent Casino Commission accepted the submission and extended the casino licence suspension to 30 September 2026, with state-appointed Manager Nicholas Weeks staying in role. The decision is consistent with the Bally's Corp-controlled board's preference for an extended remediation runway over a near-term determination risk. Star Sydney revenue is now approximately 60% below pre-suspension run-rate; the Gold Coast and Brisbane properties continue to operate under enhanced supervision.

Bally's Corp received probity approval the same week to take a combined 61% control stake (Bally's 38% with local partner Investment Holdings Pty Ltd at 23%, with Bekier and Mathieson interests folded into the structure). Chairman Soo Kim has indicated he will dismantle Star's centralised corporate structure in favour of property-level accountability, but the immediate priority is the May refinancing deadline on Star's A$700 million debt facility.

Australia's amended AML/CTF Act took effect April 1. The customer due diligence threshold dropped from A$10,000 to A$5,000, board-level oversight is now mandated with annual compliance reporting to AUSTRAC, and more than 100,000 businesses across real estate, legal, accounting, and dealer-in-precious-metals categories are newly in scope. Star and Crown are both rebuilding compliance programmes under enforcement-action remediation orders; AUSTRAC's CEO has signalled that "weak controls will face regulatory action without further warning." Star's remediation budget is A$450 million over three years; Crown's parallel programme is approximately A$300 million. The line item is now structural cost, not project cost.

The NZ Department of Internal Affairs confirmed that licence applications for online casino operations will open in July with the 12% gaming duty regime taking effect May 1. The Online Casino Act caps the market at 15 licences and mandates 4% of gross profit to community funding. SkyCity Entertainment is the presumed domestic leader; international operators including bet365, Flutter and Entain are evaluating partnership structures. Unlicensed operators must exit the NZ market by December 1. The framework is the first regulated online casino regime in Asia-Pacific; Australia is the obvious next market to watch.