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 plan deficit if betting earnings worldwide's greatest gambling hub drop below 15 billion patacas ($1.88 billion) a month after they fell short of federal government projections in the very first quarter.


Chief Executive Sam Hou Fai made the remarks on Tuesday to regional lawmakers, according to a government statement.


"If subsequent video gaming profits still do not fulfill the target, the Government will face a spending plan deficit," he stated, according to the statement.


Macau is an unique administrative area of China and is the only place where Chinese people are lawfully allowed to bet in gambling establishments.


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


"The imbalance in our fiscal structure is major and we need to keep a strong sense of crisis awareness. Macau is a little city, yet our routine expense is significant and it will continue to grow unless we deal with up to severe circumstances," he stated, according to public broadcaster TDM.


A decrease in economic development both in China and globally are key concerns for Macau's casinos, particularly provided a flurry of U.S. announcements to impose import tariffs globally, including on China, experts stated.


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


He now anticipates a prospective worst case 10% decrease in video gaming incomes for Macau versus a low single-digit growth projection.


Macau's first-quarter gaming income increased 0.6% year-on-year to 57.7 billion patacas, or 19.2 billion patacas per month, versus the federal government's full-year projection of 240 billion patacas, or 20 billion patacas per month.


Authorities in Beijing and Macau have actually mandated that the 6 certified casino operators Sands China, Wynn Macau, SJM Holdings, MGM China, Galaxy Entertainment and Melco Resorts diversify their income base away from the gambling establishment market. ($1 = 7.99 patacas) (Reporting by Farah Master: Editing by Neil Fullick)