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

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HONG KONG, April 16 (Reuters) - The leader of Macau said the enclave risks slipping into a deficit spending if gambling revenues in the world's most significant gambling center drop below 15 billion patacas ($1.88 billion) a month after they disappointed federal government projections in the very first quarter.


Chief Executive Sam Hou Fai made the talk about Tuesday to regional legislators, according to a government statement.


"If subsequent video gaming incomes still do not meet the target, the Government will face a spending plan deficit," he said, according to the statement.


Macau is a special administrative area of China and is the only location where Chinese people are legally permitted to bet in casinos.


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


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


A sluggish down in financial development both in China and globally are key issues 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, said Macau faces "second-order impacts" from the in orders for nearby Guangdong, China's largest export center, and a weaker yuan.


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


Macau's first-quarter gaming profits increased 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 per month.


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