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

HONG KONG, April 16 (Reuters) - The leader of Macau stated the enclave dangers slipping into a deficit spending if gambling revenues on the planet's most significant gaming hub drop listed below 15 billion patacas ($1.88 billion) a month after they disappointed government projections in the first quarter.


President Sam Hou Fai made the comments on Tuesday to regional lawmakers, according to a federal government statement.


"If subsequent video gaming profits still do not satisfy the target, the Government will face 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 permitted to bet in gambling establishments.


A Portuguese nest up until 1999, its economy is heavily dependent on its casino industry which contributes about 80% of the government's tax earnings.


"The imbalance in our financial structure is major and we should preserve a strong sense of crisis awareness. Macau is a small city, yet our routine expenditure is considerable and it will continue to grow unless we face up to extreme circumstances," he stated, according to public broadcaster TDM.


A decrease in financial development both in China and globally are crucial issues for Macau's casinos, particularly given a flurry of U.S. statements to impose import tariffs globally, 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 close-by Guangdong, China's biggest export center, and a weaker yuan.


He now anticipates a possible worst case 10% decline in video gaming profits for Macau versus a low single-digit development forecast.


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


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