Total commission and promotional expenses paid by Macau gaming operators rose 28 percent year-on-year in the first quarter of 2026, accounting for 20.6 percent of total gross gaming revenue (GGR) in the period, according to a CBRE Equity Research industry update released on Tuesday.Â
The figure represents an increase of 140 basis points quarter-on-quarter and 250 basis points year-on-year, highlighting an elevated promotional environment that is weighing on operator profitability despite robust top-line growth.
CBRE analysts indicated that the quality of Macau’s GGR growth has been dampened by higher commissions, a greater share of more volatile VIP revenue, and weaker EBITDA flow-through. Macau’s market-wide GGR rose approximately 14 percent year-on-year in the first quarter, with most operators landing close to consensus estimates.
Margins under pressure
Despite the 14 percent increase in market-wide GGR, aggregate Macau net revenue grew only 9.7 percent year-on-year. According to the report, part of the elevated commission load is attributable to VIP revenue growth, although the analysts noted that the broader competitive and promotional environment remains intense.
Operating cost inflation has also persisted across the market. Market-wide implied non-tax operating costs rose 4.6 percent year-on-year.
Excluding SJM, which benefited from reduced operating expenses linked to the closure of its remaining satellite casinos in the fourth quarter of 2025, non-tax expenses among the other operators increased 13 percent year-on-year, outpacing market-wide net revenue growth.
CBRE said this dynamic explains the downward revision to consensus full-year 2026 Macau property EBITDA estimates for nearly all operators following the first-quarter results. On a more positive note, implied non-tax operating expenses fell 7 percent sequentially, or 4 percent excluding SJM, with all operators registering quarter-on-quarter declines from the fourth quarter of 2025.
VIP volumes accelerate
VIP volumes increased 26.2 percent year-on-year in the first quarter, accelerating from 20.7 percent growth in the fourth quarter of 2025 and 17.6 percent in the third quarter. VIP GGR rose 19.6 percent year-on-year, compared with 11.4 percent growth in mass-market table GGR. VIP nonetheless remains a relatively small share of the market, representing approximately 15 percent of total GGR.
Growth in VIP volumes was led by Las Vegas Sands (LVS), up 68.3 percent year-on-year, and Galaxy Entertainment, up 60.7 percent year-on-year. The two operators collectively control more than 50 percent of the VIP segment. Excluding the pair, VIP volumes across the rest of the market rose a more modest 1.9 percent year-on-year.
CBRE analysts acknowledged that the acceleration in VIP activity has raised concerns about the volatility and sustainability of Macau’s current growth trajectory, particularly after market-wide GGR growth decelerated to 5.5 percent year-on-year in April.
They said the outlook ‘remains opaque’ but that they continue to see upside in current valuation levels, citing operator commentary pointing to a solid rebound in May supported by the Golden Week holiday.
