Shares in Macau casino operators collapsed today after officials in the world's biggest gambling city unveiled plans for a crackdown that would tighten their grip on the already beleaguered industry.

Hong Kong-listed operators Sands China and Wynn Macau both lost around 25%.

Melco Entertainment, SJM Holdings, MGM China and Galaxy Entertainment also fell around 17% - wiping billions off their valuations.

The sell-off came after the Macau government announced a 45-day public consultation, including a proposal for direct supervision over the gambling industry, which has faced increasing scrutiny from authorities in recent years.

Officials are looking to put government representatives on licensed operators' boards to oversee their operations, and to criminalise underground banking in the industry.

The move comes as the government in mainland China embarks on a crackdown on a wide range of industries - including tech and private education firms - as it looks to tighten its grip on the world's second biggest economy.

China's President Xi Jinping is also in the midst of a drive targeting the country's uber-rich and calling for "common prosperity".

"The casino issues are a continuation of what's been a pretty big crackdown," said Jason Ader, of New York-based investment manager SpringOwl Asset Management.

"There's a debate over whether China is even investable right now. You never like to see increased regulation, increased taxes, restrained movement. That all seems to be the status quo," said Ader, who is also a former member of Las Vegas Sands.

Today's announcement comes as the six licences permitting companies to run casinos in Macau - the only place in China where casino gambling is allowed - come up for renewal next June, when the companies will have to bid to hold on to them.

Macau's casinos usually account for about 80% of government revenue and more than half its gross domestic product, with upwards of 82,000 people working in the industry by the end of last year representing almost a fifth of the city's working population.

The city rakes in more in a single week than Las Vegas makes in a month.

However, the sector has been hammered by the coronavirus, with tourism - the casinos' lifeblood - wiped out by travel restrictions imposed by the government to prevent the disease spreading.

The industry had been already been struggling for years owing to a graft clampdown by China.

While acknowledging the gambling industry was its financial lifeline, the Macau government said it is concerned by the local economy's overreliance on the industry and the associated inflated costs of living and doing business.