It seems that once a month someone spreads the rumor that Beijing is loosening the strings. We've said it before but Beijing is always tinkering but never fully opening or closing the spigot.
As can be seen in the following chart, it didn't take long for Beijing to stabilize the Mass Market. Beijing began controlling the border in June of 2008 and by September Mass Market revenue growth was reduced to 5%. From September to the present, growth was consistently in the range of +9% to -5%. We don't have the data but our guess is the volume was even more stable. I'd say the Beijing powers are quick learners.
It has been my belief that Beijing is interested in keeping Macau growth consistent with the growth in China GDP; that is, mid to high single digits. The evidence certainly bears that out. This is good and bad for the operators. Certainly, over the long-term, this kind of stability warrants a high valuation in terms of cash flow multiples. Unlike most gaming markets there is excess demand for Macau and Beijing is the stabilizer. The downside is more near-term. As Macau approaches a 6 month period of 25%+ Mass table supply growth beginning in December, same store revenue will plummet. It is unlikely that Beijing is targeting mid to high single digit same store growth for Macau.
So don't believe the rumors that Beijing is somehow going to completely pull its big finger off the big hole in the dike to Macau. Moderation is the likely goal here and to date, Beijing has succeeded.