(Bloomberg) -- Macau casino shares continued to fall in Hong Kong on Thursday, extending a record rout from the previous day as the Chinese government moves to tighten its grip on the world’s biggest gambling hub.

Sands China Ltd. and Wynn Macau Ltd. dropped by at least 5.8%. A Bloomberg index of the six casino operators in the gambling enclave slumped as much as much as 4.3%, adding to the 23% record slump Wednesday, which was the biggest slide since its inception in 2005.

Investors are now questioning the future prospects for casinos in Macau as Beijing’s regulatory crackdown comes after years of slowing growth and the Covid-19 pandemic, which brought the city to a virtual standstill.

The government is looking at appointing representatives to “supervise” the casino operators as well as boosting local shareholdings and tightening controls on the distribution of dividends.

“The policy steer is fairly vague, in our view, but the reference to social responsibility is sending chills down the spines of investors,” Jennifer Song, senior equity analyst at Morningstar Inc., said in a report. Coming hot on the heels of the crackdowns on the technology and education sectors, the focus on casinos “represents a major new source of uncertainty,” she said.

Traders may be adopting different strategies for individual casino stocks depending on their prospects for renewing gaming licenses, according to Noah Hudson, an analyst at Guotai Junan International Holdings Ltd.

“Many of the gaming companies with parent companies listed in the U.S. might have a greater risk when it comes to them getting new gaming concessions after they expire in the next year,” he said. “I’m not expecting this to happen but it’s a legitimate fear.”

Galaxy Entertainment Group Ltd. bucked the broader selloff with a rebound of as much as 4.5% after its 20% slump a day earlier.

Traders had been boosting their bearish bets on the casino stocks in the months before the latest regulatory curbs were announced. Short interest in SJM Holdings Ltd. and Melco International Development Ltd. had climbed to the highest since 2018 and 2016 respectively in August, according to data from IHS Markit Ltd. 

SJM and Melco’s selloff continued on Thursday, sliding at least 4.7%.

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