Macau's Leader Warns World's Biggest Gambling Hub Might Face A.
HONG KONG, April 16 (Reuters) - The leader of Macau stated the enclave risks slipping into a budget deficit if betting profits on the planet's greatest gambling hub drop listed below 15 billion patacas ($1.88 billion) a month after they disappointed federal government forecasts in the very first quarter.
President Sam Hou Fai made the comments on Tuesday to regional lawmakers, according to a government declaration.
"If subsequent video gaming revenues still do not meet the target, the Government will deal with a deficit spending," he said, according to the declaration.
Macau is a special administrative region of China and is the only location where Chinese citizens are lawfully permitted to gamble in gambling establishments.
A Portuguese colony till 1999, its economy is heavily dependent on its casino market which contributes about 80% of the government's tax incomes.
"The imbalance in our financial structure is serious and we must maintain 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 severe circumstances," he stated, according to public broadcaster TDM.
A sluggish down in economic development both in China and internationally are essential concerns for Macau's gambling establishments, especially given a flurry of U.S. statements to impose import tariffs worldwide, including on China, experts said.
DS Kim, an expert at JP Morgan in Hong Kong, said Macau deals with "second-order impacts" from the expected slowdown in orders for nearby Guangdong, China's biggest export center, and a weaker yuan.
He now expects a prospective worst case 10% decline in gaming earnings for Macau versus a low single-digit growth projection.
Macau's first-quarter video gaming earnings increased 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 monthly.
Authorities in Beijing and Macau have mandated that the 6 certified gambling operators Sands China, Wynn Macau, SJM Holdings, MGM China, Galaxy Entertainment and Melco Resorts diversify their revenue base far from the casino industry. ($1 = 7.99 patacas) (Reporting by Farah Master: Editing by Neil Fullick)