UPDATE 1-Macau's gambling revenue falls to near 5-year low

(Corrects paragraph 3 to show that revenue drop is better than forecasts, not worse) * June revenue down 36.2 pct on the year vs 37 pct down in May * June revenues historically weaker than May * Decline began after start of anti-corruption drive HONG KONG, July 1 (Reuters) - Gambling revenue in the Chinese territory of Macau fell to a near five-year low in June, extending declines in the country's only legal casino hub to a thirteenth month while the rate of fall showed no signs of abating. Revenue in the world's biggest gambling centre, which earns over five times more than Las Vegas, has been plummeting since President Xi Jinping initiated a crackdown on corruption targeting the illicit outflow of money from China. Gambling revenue fell 36.2 percent in June to 17.4 billion patacas ($2.18 billion), the lowest level since November 2010, according to data released by the Macau government on Wednesday. The figure is better than analysts' forecast of a 39-40 percent decline. The former Portuguese colony, which relies on the gambling industry for over 80 percent of revenue, may launch some austerity measures should the average gaming revenue drop to below 20 billion patacas, Lionel Leong, secretary for Economy and Finance, said according to local media. Revenues in June are historically lower than in May due to a public holiday in the previous month. However, June was the first full month after the opening of Galaxy Entertainment Group Ltd's two new resort projects on May 27. The Macau government on Wednesday submitted a widely expected full smoking ban proposal to the legislative council, a move that analysts predict could prompt further falls in gaming revenue. This was tempered somewhat by news earlier this week that Macau will relax a transit visa rule it put in place a year ago. "We think consensus expectation of a 2016 recovery is too optimistic as a full smoking ban should hurt VIP revenue by 10-25 percent," wrote Karen Tang in a June 29 note. Macau casino operators have been attempting to diversify their mega resorts with new facilities to appeal to a wider audience base and secure coveted gaming tables which the government is allocating based on the success of these non-gaming attributes. The push for diversification is part of a wider plan for Macau as China's prime leisure and tourism hub together with the neighbouring island of Hengqin, already home to a mega amusement park. ($1 = 7.9830 patacas) (Reporting by Farah Master; Editing by Sunil Nair)