Macau tightened social distancing restrictions on Thursday -- closing almost everything except casinos -- as the Chinese gambling hub embarked on another round of citywide testing to battle a Covid-19 outbreak.

Case numbers are small by global comparison, with only 110 announced since the most recent outbreak began, but authorities have moved quickly to stamp out transmission as they follow mainland China's strict zero-Covid policy.

The virus has been kept largely under control in Macau but leader Ho Iat-seng said Thursday the situation was now "more complicated and more serious than ever before".

After 48 hours of mass testing that ended Tuesday, the city has ordered all residents to undergo another round starting Thursday.

Bars, cinemas, nightclubs, hair and beauty salons, gyms and sports grounds were told to close.

All restaurants have been forced to suspend dine-in services and the school year has been ended early after classes were halted at the beginning of the week.

Government buildings and banks remain closed too.

But casinos, which in normal times account for about 80 percent of government revenue, are unaffected by the restrictions.

During a 2020 outbreak, casinos were shut down for 15 days.

But Ho said Thursday that at that time the government struck an agreement with the sector that in future only casinos reporting cases would be shut down.

He said two casino staff had tested positive this week but on their days off so their workplaces were unaffected.

On Tuesday local media reported that a hotel and casino complex was locked down with 700 people inside after one infection was discovered there.

Almost all gambling is forbidden in mainland China but it is permitted in Macau, a former Portuguese colony that boasts a casino industry bigger than Las Vegas.

Macau's casinos usually account for more than half of the city's gross domestic product, with nearly a fifth of the working population employed by the industry.

The sector has been hammered in recent years, with vital tourism revenues wiped out by some of the world's harshest measures to tackle the virus -- including tough border controls, weeks-long quarantines and targeted lockdowns.

And the pandemic is not the only challenge the sector is facing.

Chinese President Xi Jinping's anti-corruption campaign has seen increased scrutiny of big-spending gamblers and corrupt officials who might travel to Macau to launder money.

On Tuesday Macau's rubber stamp legislature passed a new gambling law which will give the Chinese government more oversight over the industry, with the sector instructed that it must not undermine China's national security.

Macau's six major casino operators are all required to bid again for their licences this year.

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