Controlling operating expenses and optimizing player reinvestment and commission strategies will become increasingly important for Macau’s operators during the second half of 2026 given expectations of slowing growth, according to Seaport Research Partners.
In a note ahead of 1Q26 earnings season, which kicks off this week, Seaport’s Vitaly Umansky observed that the current Q2 faces more difficult comparisons year-on-year than Q1 – starting in May – resulting in a “material growth deceleration” for the rest of the year.
As such, operators will become more attuned to fluctuations in expenses and player reinvestment, although Umansky sees little respite in the near-term.
“While heavy player reinvestment and cost escalations in Macau have impacted margins, we believe cost increases in 2026 will be more muted than experienced in 2025, with opex growth in the 6% to 7% range,” he said.
“Player reinvestment and agent commissions remain high and we do not foresee any improvement in the market in the near/medium term, but likely see stabilization going forward. If higher end or agent business grows faster than the market, then player reinvestment/commissions could see an increase relative to GGR.”
With the government unlikely to step in to limit commissions or player reinvestment, Umansky expects margins in Macau will remain pressured for some time unless there is a strong recovery in the higher margin base mass segment, curtailment of agency business or reduced player reinvestment.
The analyst pointed out that Macau’s post-COVID growth has been driven by the premium gaming segments which in 2025 saw VIP GGR rise by 29.5% year-on-year and mass, including premium mass, rising 6.3%.
Within mass, premium mass is running at 170% of pre-COVID levels but base mass continues to lag at just 85%.
“Importantly, within base mass, while day-tripper business largely from HK and Guangdong is likely back to near pre-COVID levels, overnight base mass has continued to be relatively weak, likely below 75% to 80% of pre-Covid levels,” Umansky said. “In order to drive sustained growth, base mass recovery – overnight higher value in particular – will be a key driver.”
Seaport is forecasting 7% GGR growth for Macau in 2026 and another 7% in 2027.
Macau’s earnings season kick off Thursday morning with Las Vegas Sands scheduled to release its 1Q26 financials.
