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Casino bosses and pro-Beijing candidates dominated poll results in the Chinese gambling enclave of Macau, with democrats conceding defeat on Monday.
Sunday's polls were marred by reports of perks offered to voters during last-minute campaigning in a city which has been transformed by the gambling industry.
Macau is now the world's biggest casino capital, overtaking Las Vegas in revenues and employing some 23 percent of the total workforce.
Preliminary election results released early Monday showed democrats had secured just two out of the 14 directly-elected seats in the city's lawmaking body, down from three in the previous election in 2009.
"I concede defeat as we lost one seat," a leader of the pro-democracy camp, New Macau Association's Antonio Ng Kuok-cheong, told reporters.
"It also proved a theory that if you need to be elected in an economically booming village, what it takes is long-term material advantages," Ng said, accusing the pro-establishment camp of using its financial resources to sway voters.
A government spokesman told AFP that results would be validated in the next few days, with any appeals going to court.
Pro-democracy candidates in the city of 590,000 had campaigned on high property prices and freedom of speech.
But the increasingly popular pro-establishment camp, including casino-backed candidates, rode the wave of Macau's economic growth, which was sparked by the liberalisation of gambling in 2002.
Macau laws prohibit offering benefits to voters, but illicit campaigning remains common.
The government said Monday that two people had been arrested for offering incentives.
Hong-based Apple Daily said some casinos had given their workers the day off to vote.
The South China Morning Post reported that free transport to polling stations was offered to some voters, as well as free food and drink.
Commissioner Against Corruption Fong Man-chong admitted that many acts had "tested the boundary of legality", the Post reported.
Fourteen people were also arrested for taking pictures with their mobile phones at polling stations.
A record 145 candidates were vying for seats, but turnout was down five percent on 2009 with around 152,000 voting, the government said.
The remaining 19 seats in the 33-strong legislature are either appointed by the chief executive -- who is selected by Beijing -- or chosen by business and industry groups.