Stanley Ho - Macau Casinos Tycoon
by: David Small
Saturday May 23rd, 2015
Stanley Ho (SJM) had complete control of all gaming in Macau for 40 years. However, China’s leadership wanted Macau to expand its portfolio to include upscale shopping malls, resorts and convention centers. It seemed that Ho couldn’t turn around the market on his own. China announced that the monopoly would end just a day after the former Portuguese enclave returned to Chinese rule in 1999. The government awarded additional licenses and opened the market to foreign operators that have helped to transform that city into one of the world’s most successful tourist hotspots.
Ho still has the edge over new entrants from Las Vegas and Australia, with his 18 casinos controlling more than half of the market. His market share has been declining with each new casino that opens in Macau. However, one of the most popular sayings in the city is that when the water rises, all the boats go up with it. Although Ho’s casinos won’t be as dominant as they once were, they’ll still make money. Additionally, Ho is still the largest owner of land in Macau. So while he may have lost some gaming revenue, the rest of his land bank portfolio is worth an increasingly huge amount. The land costs are going up in Macau, so he’s worth more and more.
The Grand Lisboa, a gleaming gold complex, looks to be a bold bet to reassert SJM as the #1 operator in Macau. This is Ho’s biggest response so far to foreign companies who have stormed into Macau and seized big chunks of the gaming market. Stanley Ho is now joined by his widely respected son Lawrence and is fighting back. He is learning from his adversaries, by adopting some of their policies and hiring western expertise.*
*Recommended reading: The Art of War, by Sun Tzu. Chinese strategy explained: know yourself and the enemy, use deception, spies, and "win with ease".
Frank McFadden, previously with Sands, is now President of SJM. He has put together a largely expatriate management team from the foreign casinos. This approach differs markedly from the other SJM casinos where management and policies are 100% Chinese and nothing much changed for 40 years, including the paint and the carpets.