Inside Asian Gaming

INSIDE ASIAN GAMING | September 2011 26 STDM—or rather an iteration of it—ran Macau’s casino monopoly for 40 years. After market liberalisation in 2002, STDM became the parent of a newentity, SJMHoldings Ltd. The latter company is in turn parent to the largest casino operator in Macau by volume of gross gaming revenue, Sociedade de Jogos de Macau SA. So when Ms Ho was confirmed as a director of STDM, she was in practice being given one of the keys to the family castle. She must now apply patience and possibly some guile to make sure she eventually acquires all the keys to all the doors. The process of Ms Ho’s steady rise up the Macau hierarchy continued in May with her confirmation as chairman of MGM China Holdings, following the successful Hong Kong-listing in May of that company as a holding vehicle for MGM Macau. The latter casino resort on Macau peninsula— originally trading under the brand MGM Grand Macau when it opened in December 2007—was Ms Ho’s start in casino gaming when she became a 50:50 joint venture partner with MGM MIRAGE (now MGM Resorts International) using a sub-licence from her father’s gaming concession. She is alsomanagingdirectorofShunTakHoldings, a Hong Kong-listed shipping and property conglomerate founded by her father. It is best known for supplying the majority of the ferries that sail between Hong Kong and Macau. It also developed and owns Macau Tower and was a stakeholder with Honkong Land in the construction of the residential and shopping development One Central, next door to MGM Macau on the Macau peninsula. This network of Ho family investments indicates the extent of Ms Ho’s influence in Macau. A full explanation would probably need a flow chart rather than a brief biography. The key takeaway is that she now holds a unique position not just in contemporary Macau but in the recent history of the territory’s casino industry. For the first time in the modern era (i.e. since Dr Ho and his then partners were granted a casino monopoly in 1962), Ms Ho has been allowed to be both shareholder and director of two supposedly competing companies in the Macau gaming market— namely, STDM and MGM China Holdings (she holds an indirect minority stake in STDM and a direct but large minority stake in MGM China). The Macau government seems to feel that allowing Pansy Ho some control simultaneously over two Macau companies with competing gaming interests is a lesser evil than having a chaotic succession at STDM/SJM. The latter companies are, after all, essentially proxies for maintaining Chinese control over a burgeoning gaming market that has major foreign participants in it. In the coming months and years, Ms Ho will have the opportunity to show that she is equal to the task of following in her father’s very sizeable footsteps and that— in the phrase often used to describe non- presidential, cabinet-led government—she knows how to be ‘first among equals’. 11 (-) Michael Leven President and COO Las Vegas Sands Corp “You can win the war,” as Michael Leven is fond of saying, “but you have to win the peace.” That’s a challenge when your boss is Sheldon Adelson. Mr Adelson may not be a warmonger, but he certainly doesn’t shrink from conflict if it comes his way. If anyone has come close to winning the peace on behalf of Sheldon Adelson and Las Vegas Sands Corp, it’s Michael Leven. Since becoming group COO at a time of some existential peril for LVS in the spring of 2009, Mr Leven has made the most of lulls in the company’s respective battles for stability, political credibility and global dominance. He’s used those moments to reach out to governments, investors, contractors and company staff to explain that LVS is not the corporate version of ‘Shrek’ it is portrayed as in some sections of the media. Importantly, Mr Leven’s message tends to be well- received because he is widely trusted for his integrity. Mr Adelson may have said it best in a statement issued on the occasion of Mr Leven’s two-year contract renewal last November: “He is a real gentleman.” Mr Leven’s track record may speak for itself in the industry, but it’s worth reminding ourselves of some of the highlights. They include: the Marina Bay Sands and Sands Bethlehem openings; Sands China’s US$2.5 billion IPO; several billions of debt paid down or refinanced; fresh momentum injected into Cotai via partnerships with Hilton Worldwide, Intercontinental Hotels Group and Starwood; a 10-year deal struck with InterContinental to cross-market The Venetian and Palazzo in Las Vegas with IHG’s 180million-strong database; and last but not least, management stability largely restored at the corporate and property levels. All this has occurred in the space of two-and-a-half years and, more remarkably, in the absence of any direct gaming industry experience. Mr Leven is a veteran hotelier—a former president of Days Inn and Holiday Inn Worldwide, and a founder of the company that developed theMicrotel and Hawthorne Suites brands. Mr Leven and Mr Adelson have known each other for decades—from the days when Mr Adelson was operating charter tours.Later, when Mr Adelson owned Comdex, a global organiser of computer trade shows, and Mr Leven was running Days Inn, they’d meet occasionally for dinner. Mr Leven declined an offer to run the old Sands when Mr Adelson bought the famed Las Vegas Strip resort in 1988. But when Mr Adelson took Las Vegas Sands Corp public in 2004, Mr Leven accepted a seat on the board of directors and served for about a year. More recently, Mr Leven has been occupied in juggling three roles: strategic global management; keeping the Macau operation ticking over as interim CEO of Sands China (until the internal promotion of Ed Tracy from Sands China COO in July); and improving the corporation’s and local unit’s sometimes fraught relationships with the Macau government. The latter was especially important in the wake of last year’s ugly fall-out from the court battle between LVS and sacked Sands China CEO Steve Jacobs. Allegations made by Mr Jacobs claiming that LVS ordered background investigations into members of the Macau government—while strongly denied by the company—threatened to taint the Macau operation. That in turn threatened a negative impact on Sands China getting all the construction workers, resort staff, table games approvals and land rights it needs to realise fully its grand plans for Cotai. A close second to cultivating government ties was to improve relationships with the Macau junket operators to move Sands China up the VIP market share league table. LVS has learned “a lot over the last six or seven years,” Mr Leven has been quoted as saying. “If we made mistakes in the past, I can tell you that we won’t be perfect. We’ll probably make some more mistakes in the future,” he added. With Mr Leven in the wheelhouse, there should be a reduced risk of navigational errors.