MGM China and its parent company MGM Resorts International have recently finalized a new long-term brand licensing agreement, which not only significantly extends the cooperation period but also doubles the monthly licensing fee.
Core of the Agreement: Extension of Term and Doubling of Fees
This new agreement will take effect from January 1, 2026, replacing the expiring old contract, with a validity period of 20 years. The most critical change is in the fees: the monthly licensing fee as a percentage of MGM China's adjusted comprehensive net income has jumped from 1.75% to 3.5%. According to the agreement, MGM Resorts International will receive the lion's share of this licensing fee, about 66.6%. This represents a higher premium paid for the use of the "MGM" brand.
Financial Impact: Annual Fee Cap and Historical Expenditure
The agreement sets an annual fee cap, with the cap for the 2026 fiscal year at $188.3 million, and the cap will be assessed and determined annually thereafter. Looking back, this brand licensing fee is no small amount—$55.18 million was paid in 2023, $70.39 million in 2024, and $56.43 million in the first nine months of 2025 alone. After the new rate is implemented, this annual expenditure is expected to increase significantly.
Strategic Considerations: Brand Value and Market Position
MGM Resorts International points out that this deal "secures an important right for MGM China." They believe that the MGM brand has brought tremendous value to MGM China, as evidenced by its increased market share: before the pandemic, its market share was about 9%, and by the third quarter of 2025, it had grown to about 16%. According to PASA's official website tracking analysis of industry brand value, strong brands play a key role in attracting high-end customers and enhancing property valuations. Extending the agreement from 3 years to 20 years is seen as locking in the company's "most important intangible asset" outside of the gaming concession.
Future Outlook: Linked to Macau's Gaming Concession
This brand licensing agreement also includes an "Easter egg" of automatic renewal. If MGM China successfully obtains a new gambling license in Macau after the current ten-year gaming concession expires in 2032, then this brand agreement can automatically extend, up to December 31, 2045. The agreement also specifies that all of MGM China's existing and potentially future developed integrated resorts, casinos, and hotel operations in Macau will use the MGM brand.
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This article is from "PASA-Global iGaming Leaders" gambling industry news channel:https://t.me/pasa_news
Original in-depth gambling channel:https://t.me/gamblingdeep
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