HONG KONG: Macau's booming casino sector ground to a halt last month, after Beijing imposed restrictions on visits by mainlanders to the city, the South China Morning Post reported yesterday.

Monthly casino revenues fell for the first time in nearly three years to 6.9 billion patacas (S$1.25 billion), down 3.4 per cent from a year ago and 28 per cent from the previous month, the Post said, citing data reported at the weekend by Portuguese news agency Lusa.

Last month's contraction came in stark contrast to an average monthly growth of 52.5 per cent in the first eight months of the year. It was also Macau's smallest monthly takings in 13 months.

Macau's government declined to comment, Reuters reported.

Shares in Macau gambling stocks slid yesterday. Casino operator Galaxy slid 11 per cent, while Shun Tak, which operates a ferry between Hong Kong and Macau, fell 13 per cent.

Since June, China's central government has imposed progressively stringent limits on the frequency of mainlanders' visits to Macau in an effort to cool Macau's red-hot, largely gambling-fuelled, growth.

From once a fortnight, the frequency was lowered to once a month starting on June 1, then to once every two months starting on July 1.

The limit was further lowered to once every three months beginning Oct 1.

In April, Macau stopped issuing new casino licences and imposed a land freeze on the building of new casinos, in what analysts interpreted as a bid by Beijing to rein in its excesses amid growing social tensions and perceptions of endemic graft.

Industry watchers have been dismayed by the measures.

'There are concerns that more visa restrictions that are more severe than the previous ones will be implemented,' Mr Gabriel Chan, an analyst at Credit Suisse, told Reuters.

Visa restrictions may stay until the first half of next year, said Mr Gary Pinge, a gaming analyst at Macquarie Research. Until they are lifted, the gaming sector may remain sluggish, he said.

Casino revenue accounted for 60 per cent of Macau's gross domestic product in the year ended June, six years after the government opened up the industry to foreign operators.

But fierce competition, a casino glut, and now, the visa restrictions, have recently eroded casino earnings.

For the whole of this year, Macau's gambling revenue may grow about 32 per cent, Mr Chan said, less than the nearly 50 per cent rise last year.

The territory's Secretary for the Economy and Finance, Mr Francis Tam, has said Macau's economic growth may come in at just 10 per cent this year, reported the Post.

Shares in the six casino operators have fallen between 51 per cent and 87 per cent in the past 12 months.

Some analysts warn that, in the longer term, more bad news is in store for the city.

'Because of the financial crisis, companies may face financing gap problems,' MrChan told Reuters.

'And even if these companies are able to complete these projects, there are concerns about whether there will be demand for them.'