HONG KONG (REUTERS) - Police in Macau, the world's biggest gambling hub, have broken up a prostitution ring and arrested 42 mainland Chinese in the second major crackdown since Chinese President Xi Jinping visited the southern Chinese territory at the end of last year.

Macau, the only place in China where citizens can legally gamble in casinos, has been reeling from the impact of a corruption crackdown by Xi. Gaming revenue growth has plunged for nine straight months and is set to drop 40 percent in March.

Yu Zhihua, a spokesman for the Macau Public Security Police, told Reuters on Wednesday all those arrested were from the mainland, with the youngest aged 17.

In January, authorities shut down a prostitution syndicate, making a high profile arrest of a senior casino executive, the nephew of gaming magnate Stanley Ho.

The prostitution ring shut down on Tuesday had recruited women from the mainland through the use of mobile telephone applications. The syndicate was operating in a Macau hotel but Yu was not permitted to give the name.

Until a year ago, the former Portuguese enclave, was a key playground for wealthy businessmen and mainland officials, who bet lavishly, spending a minimum of 1 million yuan per bet.

But Xi's unrelenting war on graft has led most of Macau's VIP customers to steer clear of the territory's 35 casinos, leaving glitzy parlours bare.

A new local administration that took power in December 2014 has made diversification away from the gambling industry a key priority. Macau's economy relies on the casino industry, which contributes more than 80 percent of government revenues.