Macau's Chief Executive Warns Budget Deficit Looms Amid Gaming Revenue Decline

Macau's Chief Executive, Sam Hou Fai, has warned that the city risks a budget deficit if monthly casino revenues fall below MOP15 billion ($1.88 billion), following weaker-than-expected first-quarter results. The region's heavy reliance on gaming taxes—contributing about 80% of government revenue—exposes significant fiscal vulnerability, with public expenditure and social welfare costs continuing to rise. Analysts, including JP Morgan’s DS Kim, now forecast a potential 10% decline in gaming revenue for the year, citing broader economic headwinds such as global slowdowns, a weaker yuan, and reduced demand in China's Guangdong province. The government acknowledges the urgent need for economic diversification and is considering development in healthcare, technology, and financial services to reduce dependence on casinos. Policy makers stress the importance of crisis awareness and prudent fiscal management, given that current revenues are falling short of the government's monthly targets. Beijing and Macau authorities are also urging the city's six licensed casino operators to diversify their business models for long-term resilience.