HONG KONG, April 16 (Reuters) - The leader of Macau said the enclave risks slipping into a budget deficit if gambling revenues in the world's biggest gambling hub drop below 15 billion patacas ($1.88 billion) a month after they fell short of government forecasts in the first quarter.
Chief Executive Sam Hou Fai made the comments on Tuesday to local legislators, according to a government statement.
"If subsequent gaming revenues still do not meet the target, the Government will face a budget deficit," he said, according to the statement.
Macau is a special administrative region of China and is the only place where Chinese citizens are legally allowed to gamble in casinos.
A Portuguese colony until 1999, its economy is heavily reliant on its casino industry which contributes about 80% of the government's tax revenues.
"The imbalance in our fiscal structure is serious and we must maintain a strong sense of crisis awareness. Macau is a small city, yet our regular expenditure is substantial and it will continue to grow unless we face up to extreme circumstances," he said, according to public broadcaster TDM.
A slow down in economic growth both in China and globally are key concerns for Macau's casinos, especially given a flurry of U.S. announcements to impose import tariffs globally, including on China, analysts said.
DS Kim, an analyst at JP Morgan in Hong Kong, said Macau faces "second-order impacts" from the expected slowdown in orders for nearby Guangdong, China's largest export hub, and a weaker yuan.
He now anticipates a potential worst case 10% decline in gaming revenues for Macau versus a low single-digit growth forecast.
Macau's first-quarter gaming revenue rose 0.6% year-on-year to 57.7 billion patacas, or Live Draw SGP 19.2 billion patacas per month, 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 revenue base away from the casino industry. ($1 = 7.99 patacas) (Reporting by Farah Master: Editing by Neil Fullick)