UPDATE 1-Macau gambling revenue drops 39 pct in March as VIPs keep clear

* Second-worst result on record * Analysts cautious on short-term outlook * Govt assessing casinos ahead of license review (Adds corruption, diversification context, shares) HONG KONG, April 1 (Reuters) - Gambling revenue in the Chinese territory of Macau plummeted 39 percent in March, the 10th consecutive monthly fall, as high rollers steered clear of the world's biggest casino hub where the take is 7 times as much as in Las Vegas. The revenue drop is the second worst on record for the country's only legal gaming centre - a playground for government officials and executives of state-owned enterprises before President Xi Jinping last year began a crackdown on corruption. Revenue fell to 21.5 billion patacas ($2.7 billion) from 35.5 billion patacas a year earlier, showed government data on Wednesday, just below the average estimate of 5 analysts polled by Thomson Reuters. Analysts are cautious about Macau's short-term prospects citing worsening demand at the top end of the market, with high rollers keeping a low profile amid a spate of investigations of officials and executives for graft. In the longer term, the outlook is more optimistic due to infrastructure development shortening travel times to Macau, as well as new gaming, hotel and leisure facilities attracting more visitors. Analysts estimate as few as 2 percent of China's 1.4 billion people have visited Macau. The special administrative region earns more than 80 percent of government revenue from its 35 casinos, but in an annual policy address on March 23, Macau Chief Executive Fernando Chui urged greater diversification. Ahead of the renewal of gaming licences starting in 2020, the local government this year is conducting an assessment of the casino operators Melco Crown Entertainment Ltd, Sands China Ltd, Wynn Macau Ltd, SJM Holdings Ltd, MGM China Holdings Ltd and Galaxy Entertainment Group Ltd. The review will focus on how effectively the companies have incorporated non-gaming facilities within their resorts and their contribution to the local economy and society, Chui was quoted by local media as saying. Non-gaming revenue makes up less than 10 percent of total revenue, compared with more than half in Las Vegas. Hong Kong-listed Macau casino stocks fell as much as 2 percent on Wednesday. The shares have fallen as much as 22 percent since the start of 2015, versus the benchmark Hang Seng Index which rose 6 percent over the same period. (Reporting by Farah Master; Editing by Christopher Cushing)