British firms size up Macau jackpot

BALFOUR Beatty's £175m contract to build a Las Vegas-style hotel in China's hottest gaming enclave has raised hopes that other British businesses could profit from Asia's latest boom.

Macau, a tiny former Portuguese colony on the South China coast, is in the throes of an unprecedented wave of investment as global gaming giants position themselves for a slice of the action.

Analysts reckon Macau will surpass Las Vegas for gambling revenue soon, possibly this year, noting its avid Asian gamers spend twice as much per head as visitors to the US desert town.

Last year, Vegas pulled in $5.3bn (£2.8bn) while Macau's punters fished $5.1bn from their pockets. Deutsche Bank has estimated Macau's gaming revenue could grow 20% a year for the next half-decade.

Macau's economy grew by a quarter last year after expansion of almost 50% in the second quarter alone. Analysts estimate that, over the next five years, the equivalent of £10 billion could be invested in hotels, casinos, convention facilities and malls.

'It certainly is the global hotspot for gaming companies,' said an economist in Hong Kong - the former British colony sits a short ferry ride across the Pearl River Delta from Macau.

Balfour Beatty's win came through Gammon, a Hong Kongbased engineering and construction-company in which Balfour, led by chief executive Ian Tyler, picked up a 50% interest seven months ago for about £35m. The balance of the group is held by Jardine Matheson, one of Hong Kong's oldest trading groups.

Together with a Macau partner, Gammon is the lead contractor on the 3000-room, 32-storey Venetian Macau. The £1.1bn project will be the flagship property for US group Las Vegas Sands, one of the biggest Vegas players.

Britain's InterContinental Hotels is among seven hotel operators that have said they will back new properties along the fast-growing Macau strip, part of which was built on land reclaimed from the sea.

Macau's boom has been triggered by the local government's decision to liberalise gaming in the territory, inviting powerful Las Vegas players to compete head-to-head with a local casino operator.

At the same time, the central government has eased rules on mainland visitors, sparking a surge in arrivals from the rest of China, where casinos and gambling remain illegal.