Macau's Leader Warns World's Biggest Gambling Hub Could Face A.

HONG KONG, April 16 (Reuters) - The leader of Macau said the enclave threats slipping into a budget deficit if gambling revenues in the world's greatest gaming center drop listed below 15 billion patacas ($1.88 billion) a month after they fell short of government forecasts in the very first quarter.


President Sam Hou Fai made the discuss Tuesday to local legislators, according to a government statement.


"If subsequent video gaming earnings still do not meet the target, the Government will face a budget deficit," he said, according to the declaration.


Macau is an unique administrative area of China and is the only place where Chinese citizens are legally allowed to bet in casinos.


A Portuguese colony up until 1999, its economy is greatly reliant on its gambling establishment market which contributes about 80% of the government's tax profits.


"The imbalance in our financial structure is serious and we must maintain a strong sense of crisis awareness. Macau is a little city, yet our regular expenditure is significant and it will continue to grow unless we confront severe scenarios," he stated, according to public broadcaster TDM.


A decrease in financial growth both in China and worldwide are key concerns for Macau's casinos, particularly given a flurry of U.S. announcements to enforce import tariffs internationally, consisting of on China, experts said.


DS Kim, an expert at JP Morgan in Hong Kong, stated Macau deals with "second-order effects" from the expected downturn in orders for nearby Guangdong, China's biggest export hub, and a weaker yuan.


He now prepares for a potential worst case 10% decline in gaming earnings for Macau versus a low single-digit growth projection.


Macau's first-quarter gaming income rose 0.6% year-on-year to 57.7 billion patacas, or 19.2 billion patacas monthly, versus the government's full-year forecast of 240 billion patacas, or 20 billion patacas each month.


Authorities in Beijing and Macau have mandated that the six licensed gambling establishment operators Sands China, Wynn Macau, SJM Holdings, MGM China, and Melco Resorts diversify their profits base far from the casino market. ($1 = 7.99 patacas) (Reporting by Farah Master: Editing by Neil Fullick)