* Casino stocks fall 1-4 pct on govt review of casino growth
* Table limits on casinos good for existing players -analysts (Adds broker, analyst quotes, details)
By Sui-Lee Wee
HONG KONG, Oct 13 (Reuters) - Macau casino stocks slid early on Tuesday after the former Portuguese enclave said it may review rules governing the world's fastest-growing gambling market, and could introduce new ones that might limit expansion.
But analysts and brokers said the reaction from investors was purely psychological and did not reflect the growth fundamentals of the enclave, the only place in China where gambling is legal. Wynn Macau, the Asia unit of U.S. casino giant Wynn Resorts, lost 1.1 percent before later turning positive, and rival SJM Holdings eased 2.2 percent at the opening.
Galaxy Entertainment Group and Melco International were down 1.4 percent and 3.8 percent, respectively.
Some of the stocks later pared those losses, with Wynn Macau even rising slightly above Monday's close.
Macau is considering rules that might impose limits on the number of tables and raise the age limit for casino customers, according to a statement posted on the city's official website, www.gov.mo..
"The problem of Macau now is oversupply, so if the government restricts the supply, it is good for the existing players," said Francis Lun, a general manager at Fulbright Securities.
Macau's six casino operators include Las Vegas Sands, Wynn Resorts, Galaxy, SJM Holdings Ltd, Melco Crown Entertainment Ltd and a casino jointly operated by MGM Mirage and local businesswoman Pansy Ho.
Among new regulations now under discussion, the government is considering raising the entry age for casinos to 21 from 18 and dictating that slot machine halls be moved away from residential areas and into commercial zones.
The new rules appear to be aimed at cleaning up an industry that has seen explosive growth in the last three years.
That would contrast with rules introduced in April 2008, when the government slapped a moratorium on new casino licenses and implemented a building freeze, a move seen as motivated by an increasingly concerned Beijing.
"I do not believe the age limit restriction will have a material impact on gaming revenues in Macau," said Aaron Fischer, head of Asian property and gaming at CLSA.
"I think it's unlikely that the government will limit the number of tables," he said. "If they limit the table numbers, it should be positive for the stocks because of higher returns."
Macau stepped onto the global gambling stage following reforms that put an end to a monopoly earlier this decade and awarded licenses to many players that boosted competition. The Chinese territory generated HK$105.6 billion ($13.5 billion) of gross gaming revenue in 2008, more than double the HK$46.7 billion generated by the Las Vegas Strip during the same period.
"On the supply side, if the Macau government really wants to curb growth, they should limit the number of casinos because new casinos drive demand, tables don't," Fischer said.
(Additional reporting by Alison Leung, Editing by Doug Young and Ken Wills)