By Dhirendra Tripathi

Investing.com – Casino stocks were gainers Thursday after issue of a consultation paper in Beijing rekindled hopes that they might be able to pursue their business in Macau.

The paper suggests tighter regulations. However, the shares were supported by the hope of continued business continuity and clear rules. Current licenses for operating in the region, known as Asia’s Las Vegas, expire in June next year.

Melco Resorts stock (NASDAQ) soared 6% while Wynn Resorts stock surged (NASDAQ) 5% Las Vegas Sands (NYSE:), were up 2.7% & 2.8%, respectively. Studio City shares were up only.3% in the last 24 hours.

After a forum lasting 45 days in Beijing, the consultation paper was created. It addresses regulatory oversight and gambling license limits. It includes comments from government officials, as well a report of the Chinese government on how to promote a healthy and sustainable gaming industry.

 Morgan Stanley released a note in response to the news saying it expects status quo with six licenses in Macau with a validity of 10 to 20 years, dividend issuance still allowed, and taxes to be unchanged. The note stated that there would be greater oversight of operation, and non-gaming investments could prove to be return dilutive.

Macau is located off Hong Kong, and it’s part of China. The local authorities had previously called for stricter oversight of casinos operators, and greater ownership by the community in any gaming businesses operating within the area.

China has taken steps to curb high-stakes gaming in Macau. This involves betting that is converted Hong Kong dollars. The gambling industry is thought to facilitate illicit money laundering and currency outflows.

In the last year year, the Chinese government, in an attempt to develop a model state and cleanse the society of aspects it considers harmful to society, has capped the number of hours children can spend on online games and tightened ways the country’s tech companies can use consumer data, among other changes. Learn more about Chinese stocks’ outlook and regulatory changes.