(Reuters) – Citigroup initiated coverage of Wynn Resorts Ltd with a „sell“ rating and a price target of USD 29, and said it does not see any catalysts for the stock until the second half of 2009.

„Although we believe Wynn is the best positioned U.S. (casino) operator in Macau, the opening of Encore in Las Vegas, visa issues and commission caps in Macau leave many landmines in the road ahead,“ analyst Anil Daswani said in a note to clients.

In Las Vegas, where Wynn plans to open its luxury resort Encore in December, the downturn in the economy has hit attendances, with the city recording declines in monthly gaming revenue in the last nine months, the analyst said.

Daswani also said he sees no sign of relaxation in restrictions on the number of times mainland Chinese travellers are allowed to visit Macau.

„The new visa policy will make Macau properties less attractive as investments to mainland Chinese. We could see a further reduction in transaction volume, and price cuts could soon follow,“ Daswani said.

However, Macau continues to be the biggest gaming market in the world despite the visa restrictions, he added.

As Wynn and Melco Crown Entertainment Ltd are the only operators adding capacity in Macau over the next 18 months, the two could eke out enhanced market share, Daswani said.

The analyst said an executive order sanctioning commission caps on junket operators is inevitable and could lead to yet another leg down in revenue for companies operating casinos in Macau.

The analyst also said he is concerned about the balance sheets of other casino operators in Macau like Galaxy Entertainment Group, Las Vegas Sands Corp and MGM Mirage Inc.

Shares of the company were down 58 cents at USD 37.00 Wednesday on Nasdaq.