Credit rating agency Moody’s Investor Service has painted a bleak picture over Macau’s faltering economy horizon as it downgraded the city state’s sovereign debt status amid slumping gaming revenue.

From Aa3, Macau’s long-term sovereign debt rating now stands at Aa2 with a “negative” outlook due to the uncertainty surrounding Chinese special autonomous region’s growth, which has been stymied by low revenues from its casinos. Moody’s also lowered Macau’s long-term foreign currency bond ceiling to Aa2 from Aaa and its long-term foreign currency deposit ceiling to Aa3 from Aa2.

Sovereign credit ratings, which are indications on the government’s ability to repay obligations, are used by investors as proxies for the strength and stability of the local economy.

“The rating downgrade reflects Moody’s view that the sharp weakening in the economy, with growth remaining highly volatile, coupled with the limited policy response to the fall in gaming revenues, leave Macao’s credit profile weaker than those of Aa2 peers,” the debt watcher said in a statement.