Governments around the world have discretionary power over many elements of their economies, if they do nothing they allow the companies to try to make their revenues. Sometimes governments will exert their power to show the companies who is boss.

If you think about China, for years gambling is allowed but just off the coast of China and a boat ride from Hong Kong is the former Portuguese colony of Macau where the economy relies on gambling for its revenues. If you have a picture of what Las Vegas looks like, then you know the skyline of Macau for the same casinos operate in both places.

In an article by Farah Master and Donny Kwok of Reuters, shares of gambling casino stocks fell because Lei Wai Nong, Macau’s Secretary of Economy and Finance gave notice of a 45 day consultation period on the gambling industry pointing at deficiencies in industry supervision.

Bejing examined Macau and seems to be be wary of Macau’s acute reliance on gambling but has not said how the licence rebidding process will be judged.

JP Morgan analyst D.S. Kim downgraded to neutral or underweight all Macau gambling names from overweight because of the tougher scrutiny on capital management and daily operations ahead of licence renewals.

Beijing has stepped up a war on cross-border flows of funds for gambling, hitting the funding of Macau’s junket operators and their VIP customers. Similar to gambling casinos everywhere concerns about underground lending and illegal cash transfers every once raises the bureaucracy eyebrows.

Perhaps by Thanksgiving it will be time to revisit gambling stocks.

Linking to dividend paying stocks, investors all search for seeming recession proof stocks and generally gambling stocks are because in good times people gamble, in bad times more people gamble and the house wins. However all casinos are regulated by governments and governments can change their minds, watch the signs of regulatory bodies in whichever industry you invest in.

There are more questions than answers, till the next time – to raising questions.