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

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


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


"If subsequent video gaming profits still do not meet the target, the Government will deal with a spending plan deficit," he said, according to the declaration.


Macau is an unique administrative region of China and is the only location where Chinese citizens are lawfully enabled to gamble in gambling establishments.


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


"The imbalance in our financial structure is major and we must keep a strong sense of crisis awareness. Macau is a small city, yet our regular expense is substantial and it will continue to grow unless we confront extreme situations," he said, according to public broadcaster TDM.


A slow down in financial growth both in China and worldwide are key issues for Macau's casinos, particularly provided a flurry of U.S. announcements to impose import tariffs internationally, including on China, experts said.


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


He now prepares for a prospective worst case 10% decrease in gaming revenues for Macau versus a growth projection.


Macau's first-quarter gaming income rose 0.6% year-on-year to 57.7 billion patacas, or 19.2 billion patacas each month, versus the government's full-year projection 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 profits base far from the casino industry. ($1 = 7.99 patacas) (Reporting by Farah Master: Editing by Neil Fullick)