Skip to content
Operations & Logistics

Why casino operating costs are rising faster than revenue

Casino operating costs are rising faster than casino revenue across every major land-based market that has reported this year, and the fastest-growing cost is the cost of attracting a visit rather than the cost of staffing one. Macau’s gross gaming revenue fell for a fourth consecutive month in September while the October holiday produced the highest daily visitor average the territory has recorded, so volume and revenue have come apart. For anyone running operations into a third-quarter results call and a 2027 budget, the question is no longer how to grow visits but how much each visit costs to serve, and which of those costs move with footfall rather than with revenue.

Key Takeaways

  • Macau’s gross gaming revenue was MOP18.06 billion in September 2026, down 1.2 per cent year on year and the weakest month of the year, on figures from the Gaming Inspection and Coordination Bureau. Nine-month revenue of MOP187.116 billion is 3.2 per cent ahead of 2025 and 15.1 per cent below the same period of 2019. (1)
  • Complimentary goods and services make up 62.6 per cent of Macau operators’ operating expenses, on the Statistics and Census Service Gaming Sector Survey for 2025. Commissions and customer rebates grew 11.6 per cent that year while staff costs grew 6.0 per cent on a workforce that added 104 people. (5)
  • Las Vegas Sands reported consolidated net revenue down 0.7 per cent for the second quarter of 2026 with resort operations expense up 10.6 per cent, which took its Macao margin from 31.5 to 24.0 per cent and Marina Bay Sands from 55.3 to 49.9 per cent. The pattern is not peculiar to Macau. (9)

What did Macau’s September and October numbers actually show?

They showed more people arriving and less money being won. The September figure of MOP18.06 billion was 1.2 per cent below September 2025 and the lowest month of 2026, which makes four consecutive monthly falls. (1) Over the seven-day National Day holiday from 1 to 7 October, the Macao Government Tourism Office counted 1,142,974 visitors at a daily average of 163,282, up 15.5 per cent on last year’s holiday, with arrivals peaking at 210,276 on 4 October. Hotel occupancy averaged 91.3 per cent, 3.1 percentage points higher than 2025 and touching 97 per cent on 2 October, and the average room rate still eased 1.7 per cent to MOP1,677.3. (2)

Across July and August total visits rose 4.5 per cent to 8.02 million while overnight visits fell 2.5 per cent to 3.05 million, and gaming revenue per overnight visitor was broadly flat, on channel work by the CLSA analyst Jeffrey Kiang. (3) Day-trippers are where the growth is, and a day-tripper arrives on a subsidised bus, eats a comped meal and leaves the same evening. Jefferies now expects October revenue to fall about 7 per cent against a month that grew roughly 16 per cent a year earlier. (4)

Which costs are rising, and why is it not payroll?

The cost that is rising is the cost of buying the visit, and payroll is the slowest-moving line on the page. The Statistics and Census Service survey of Macau’s eight gaming enterprises for 2025 puts total expenditure at MOP101.44 billion, up 7.5 per cent, of which operating expenses were MOP43.72 billion and staff costs MOP22.77 billion. Staff costs grew 6.0 per cent on a full-time workforce of 53,075, a net increase of 104 people across the whole year, so nearly all of that was pay rate rather than headcount. Purchases of goods, commissions and customer rebates grew fastest at 11.6 per cent, reaching MOP25.88 billion. (5)

Within operating expenses, complimentary goods and services are 62.6 per cent of the total, split as hotel accommodation 32.4 per cent, food and beverage 20.3 per cent, other complimentary items 6.4 per cent, and bus, ferry and air tickets 3.5 per cent. (5) Set that against a visitor base shifting towards same-day arrivals and the arithmetic goes the wrong way, because comps, transport and covers scale with the number of people through the door while gaming revenue scales with the far smaller number who play seriously.

Sands China showed the same shape in its first half, with net revenues up 11.1 per cent, total operating expenses up 14.2 per cent and adjusted property EBITDA down 3.4 per cent. (6)

Is this only a Macau problem?

No, and Singapore is the clearest proof of that, because Marina Bay Sands has no day-tripper problem and still gave up five and a half points of margin in a single quarter. (9)

MarketVisitsGaming revenueCost and margin
MacauTotal visits up 4.5% across July and August, overnight visits down 2.5%September GGR down 1.2%, a fourth monthly fall, nine months up 3.2%Sands China’s Macao EBITDA margin 24.0%, from 31.5% a year earlier
SingaporeNo material change in access or visitor mix at Marina Bay SandsSecond-quarter net revenue down 0.6%Marina Bay Sands EBITDA margin 49.9%, from 55.3%
Las VegasVisitor volume down 4.3% to 3 million in AugustStrip win up 0.7%, non-baccarat table revenue down more than 19%Citywide occupancy 74.1%, down 3.4 points, average room rate down 7.4% to $150.32

Sources: (1), (3), (7), (8) and (9).

Las Vegas has the opposite shape and ends up in the same place. Visitor volume fell 4.3 per cent to 3 million in August, and Strip gaming win held up at 0.7 per cent growth only because high-end baccarat wagering rose nearly 35 per cent to $848.8 million while non-baccarat table revenue fell more than 19 per cent. (7) Passenger numbers at Harry Reid International were down 9.2 per cent, a nineteenth consecutive monthly decline. Craig Billings of Wynn Resorts has put the choice as occupancy against rate, and Bill Hornbuckle of MGM Resorts has pointed at parking, resort fees and water as costs creeping into what a value customer pays. (8)

Macau’s operators also carry capital commitments that do not flex with revenue. The 2022 concessions committed about $19.3 billion of investment with more than $16 billion of it non-gaming, and the government is now reviewing delivery across 2023 to 2025, with each concessionaire filing an annual implementation report. (10)

What should an operations team do before the third-quarter results?

Split the cost base by what actually drives it, then price a visit segment by segment. Five steps, all of which can be started from data a property already holds.

  1. Tag every operating cost line as volume-driven, revenue-driven or fixed. Comps, transport subsidies, covers and housekeeping belong in the first group, and commissions and rebates in the second.
  2. Build cost per visit for each segment separately, overnight against same-day and graded play against ungraded. One blended average hides the segment that is losing money.
  3. Set comp and rebate authority thresholds against contribution per visit rather than theoretical win, and put a named person against each threshold.
  4. Find the occupancy and rate point at which filling the last rooms costs more than it returns, using your own 2026 holiday trading as the test rather than a budget assumption.
  5. Take the result into the 2027 budget before the capital plan closes, because fixed commitments and refurbishment schedules are decided earlier than operating budgets are.

Boardroom Questions

  • Which of our operating costs move with visitor numbers rather than with revenue, and who owns each of those lines?
  • What does a same-day visitor cost us to serve, and what does one return?
  • At what occupancy and what room rate does an additional room night stop paying for itself?
  • If visits rise 5 per cent next year and gaming revenue is flat, what happens to our margin, and what have we already committed to spend regardless?

Sources

  1. Gaming Inspection and Coordination Bureau (DICJ), Macao SAR, Monthly Gross Revenue from Games of Fortune, September 2026, released 1 October 2026, dicj.gov.mo. September gross gaming revenue of MOP18.06 billion, down 1.2 per cent year on year, a fourth consecutive monthly fall and the lowest month of 2026; nine-month revenue of MOP187.116 billion against MOP181.341 billion a year earlier, up 3.2 per cent and 15.1 per cent below the same period of 2019.
  2. Macao Government Tourism Office, National Day Golden Week visitor arrivals and hotel occupancy, 1 to 7 October 2026, published 8 and 9 October 2026, macaotourism.gov.mo. Total arrivals of 1,142,974 at a daily average of 163,282, up 15.5 per cent year on year, peaking at 210,276 on 4 October; average hotel occupancy of 91.3 per cent, up 3.1 percentage points, peaking at 97 per cent on 2 October; average room rate of MOP1,677.3, down 1.7 per cent.
  3. CLSA Ltd, research note by Jeffrey Kiang on third-quarter 2026 Macau gaming earnings and visitation, 12 October 2026, as reported by GGRAsia, ggrasia.com. July and August total visitation up 4.5 per cent to 8.02 million with overnight visitation down 2.5 per cent to 3.05 million; gaming revenue per overnight visitor broadly stable year on year; third-quarter sector EBITDA estimated down 11 per cent year on year to just under US$1.84 billion on gross gaming revenue down 3.8 per cent to MOP60.21 billion, with higher commissions and rebates weighing on profit.
  4. Jefferies, research note by Anne Ling and Jingjue Pei on Macau October 2026 gross gaming revenue, 13 October 2026, as reported by Asia Gaming Brief, agbrief.com. October gross gaming revenue forecast down 7 per cent year on year against a month that grew about 16 per cent a year earlier, channel checks indicating a 6 to 10 per cent decline, November forecast at minus 2 per cent and December at plus 2 per cent, with adjusted EBITDA margins expected to stay under pressure.
  5. Statistics and Census Service (DSEC), Macao SAR, Gaming Sector Survey 2025, published September 2026, dsec.gov.mo. Eight gaming enterprises surveyed; total receipts of MOP251.75 billion, up 8.8 per cent; total expenditure of MOP101.44 billion, up 7.5 per cent; operating expenses of MOP43.72 billion, up 7.7 per cent; staff costs of MOP22.77 billion, up 6.0 per cent, on 53,075 full-time employees, a net increase of 104; purchases of goods, commissions and customer rebates of MOP25.88 billion, up 11.6 per cent; complimentary goods and services at 62.6 per cent of operating expenses, comprising hotel accommodation 32.4 per cent, food and beverage 20.3 per cent, other complimentary goods and services 6.4 per cent and bus, ferry and air tickets 3.5 per cent.
  6. Sands China Limited, 2026 Interim Results, announced 17 August 2026, sandschina.com. Net revenues up 11.1 per cent to HK$30.4 billion, total operating expenses up 14.2 per cent to US$3.32 billion, adjusted property EBITDA down 3.4 per cent to US$1.07 billion, profit of HK$398 million, down 3.6 per cent, with higher patron incentives, sales and marketing costs and payroll named as the drivers.
  7. Nevada Gaming Control Board, Gaming Revenue Report, August 2026, released 1 October 2026, gaming.nv.gov. Statewide win of $1,266,105,114, up 3.14 per cent; Las Vegas Strip win of $684.1 million, up 0.7 per cent; Strip baccarat wagering of $848.8 million, up nearly 35 per cent, and baccarat revenue of $155 million, up 34 per cent; non-baccarat table revenue down more than 19 per cent.
  8. Las Vegas Convention and Visitors Authority, Las Vegas Visitor Statistics, August 2026, lvcva.com, with executive comments and airport data reported by The Nevada Independent, October 2026. Visitor volume of 3 million, down 4.3 per cent; hotel occupancy of 74.1 per cent, down 3.4 percentage points; average daily room rate of $150.32, down 7.4 per cent; Harry Reid International Airport passengers down 9.2 per cent to more than 4.1 million, a nineteenth consecutive monthly decline; Craig Billings of Wynn Resorts on weighing occupancy against rate and Bill Hornbuckle of MGM Resorts on parking, resort fees and water.
  9. Las Vegas Sands Corp., Second Quarter 2026 Earnings Release, 22 July 2026, investor.sands.com. Consolidated net revenue of $3,154 million, down 0.7 per cent, with resort operations expense of $2,041 million, up 10.6 per cent from $1,846 million; Macao operations net revenue of $1,790 million with adjusted property EBITDA of $430 million, a margin of 24.0 per cent against 31.5 per cent a year earlier; Marina Bay Sands net revenue of $1,380 million, down 0.6 per cent, with adjusted property EBITDA of $689 million, down 10.3 per cent, a margin of 49.9 per cent against 55.3 per cent.

Macao SAR Government, 2026 Policy Address delivered by Chief Executive Sam Hou Fai to the Legislative Assembly, 18 November 2025, gov.mo, with the gaming concession investment commitments agreed in December 2022. Review of concessionaire investment delivery across 2023 to 2025 announced, annual implementation status reports required from each concessionaire, and total committed investment of about $19.3 billion of which more than $16 billion is non-gaming; Secretary for Economy and Finance Tai Kin Ip on government monitoring of the investment position