Inside Asian Gaming

July 2008 | INSIDE ASIAN GAMING 15 14 Pansy Ho Chui-king Managing Director, MGM Grand Paradise Managing Director, Shun Tak Holdings 15 Tan Soo Nan Chief Executive, Singapore Tote Board 16 J. Terrence “Terry” Lanni Chairman and CEO, MGM MIRAGE Stanley Ho, the former Macau gaming monopolist, has 17 children, so it was not inevitable that Pansy Ho—a middle-ranking sibling in terms of birth order—would emerge as a potential heir to his business. Like all rich and powerful families, the Ho clan has had its squabbles over the years. The fact that Dr Ho gave Ms Ho a chance and the fact she grabbed it and succeeded suggests a number of things. First, Dr Ho saw potential, and second, she had the strength of will and hunger to succeed. Ms Ho deserves to be on any Top 50 list of Asian gaming executives, both in her own right as a Macau casino operator and also as a director of her father’s Macau investment holding company, Sociedade de Turismo e Diversões de Macau (STDM), and closely scrutinised by the US regulatory authorities, who have a track record of keeping her father at arm’s length. Formal approval for the deal is still pending from the New Jersey regulator. As a potential heir to Dr Ho’s business empire, though, Pansy Ho’s profile is likely to grow rather than diminish in coming years. managing director of Shun Tak Holdings, the Macau-focused shipping and property conglomerate founded by Stanley Ho. Her 50:50 joint Macau venture with Las Vegas casino operator MGM MIRAGE has borne fruit in the form of MGM Grand Macau. The US$1.25 billion property had a first phase opening in December 2007. The second phase opening is expected to feature 4,400 square meters of extra gaming space on the second floor, subject to government approval.The propertymay also benefit from extra VIP traffic when Shun Tak’s apartment and retail complex, One Central Residences, opens next door in 2009. Ms Ho has been far more than a caretaker for Shun Tak. She had the vision to see the need to diversify from its core business as a ferry operator. Under her leadership and thanks to STDM’s extensive land bank, she has built Hong Kong-listed Shun Tak into an entity recently praised by analysts as Macau’s most diversified play. Things haven’t gone entirely smoothly. Ms Ho’s link up with MGM MIRAGE was As Chief Executive of Singapore’s Tote Board, Tan Soo Nan is responsible for overseeing one of Asia’s oldest and most successful government gaming monopolies. The Tote Board manages the city’s horse racing industry through the Singapore Turf Club, as well as the totalisator system— the technology for organising trackside parimutuel betting. Through its wholly- owned subsidiary Singapore Pools (Private) Ltd, acquired in 2004, it also controls the Singapore lottery. Lottery games include the hugely popular 4D draw, plus Toto, Singapore Sweep and football betting. Singapore Pools was first set up in 1968 as a legal alternative to widespread unregulated and unauthorised gambling in the city. According to a report in The Straits Times last month, 4D alone brought in S$4.2 billion (US$3.06 billion) in the previous financial year. The Inland Revenue Authority of Singapore (IRAS) confirmed that the game generated more than S$1 billion in taxes during that time. Around S$535 million was spent on Toto during the same reporting period, while the Singapore Turf Club said S$1.9 billion was wagered on horse racing during its last audited financial year. Mr Tan, a member of the Asia Pacific Lottery Association, has extensive business experience as a managing director of DBS bank and as a senior executive with a subsidiary of Temasek Holdings, the Singapore government’s investment vehicle. The reputed “nice guy” of the US casino industry, Mr Lanni assumed the top job at MGM Grand, Inc, in 1995. In May 2000, he oversaw the company’s acquisition of Mirage Resorts, resulting in the creation of MGM MIRAGE. Under Mr Lanni’s leadership, MGM MIRAGE has become one of America’s leading casino and hotel companies and the largest casino owner on the Las Vegas Strip. Its impressive Vegas portfolio includes The Mirage, MGM Grand, Bellagio and Mandalay Bay, and the company is set to unveil the Strip’s biggest property, CityCenter, in phases from 2009 at an expected cost of over US$9 billion. To gain a foothold in Macau, MGM MIRAGE partnered with Pansy Ho (above), obtaining a casino sub-concession from her father Stanley Ho for US$200 million—a bargain compared to the US$900 million Melco Crown Entertainment paid Steve Wynn for its sub-concession. Mr Lanni acknowledged recently that the joint venture’s debut property, MGM Grand Macau,had under-performed as it fine tunes its marketing approach to the mainland Chinese market. According to a recent Wall Street Journal article, MGM MIRAGE “concedes it mistakenly expected name-recognition to draw customers” to its Macau property. Mr Lanni says MGM Grand Macau will increase its focus on mass-market gaming because it offers much higher profit margins than the VIP market, where fierce competition has led to ever-increasing commission rates paid to junket operators.