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 betting incomes in the world's most significant betting hub drop listed below 15 billion patacas ($1.88 billion) a month after they disappointed government forecasts in the very first .


President Sam Hou Fai made the remarks on Tuesday to regional legislators, according to a government statement.


"If subsequent gaming earnings still do not satisfy the target, the Government will deal with a deficit spending," he said, according to the declaration.


Macau is an unique administrative area of China and is the only place where Chinese residents are legally permitted to gamble in gambling establishments.


A Portuguese colony until 1999, its economy is greatly dependent on its gambling establishment industry which contributes about 80% of the federal government's tax earnings.


"The imbalance in our fiscal structure is serious and we should maintain a strong sense of crisis awareness. Macau is a little city, yet our routine expenditure is considerable and it will continue to grow unless we confront extreme scenarios," he said, according to public broadcaster TDM.


A decrease in financial growth both in China and internationally are crucial concerns for Macau's gambling establishments, specifically given a flurry of U.S. statements to impose import tariffs internationally, including on China, experts stated.


DS Kim, an analyst at JP Morgan in Hong Kong, stated Macau faces "second-order effects" from the expected slowdown in orders for nearby Guangdong, China's largest export hub, and a weaker yuan.


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


Macau's first-quarter video gaming revenue rose 0.6% year-on-year to 57.7 billion patacas, or 19.2 billion patacas per month, 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, Galaxy Entertainment and Melco Resorts diversify their profits base far from the casino market. ($1 = 7.99 patacas) (Reporting by Farah Master: Editing by Neil Fullick)