Inside Asian Gaming

September 2014 inside asian gaming 13 MCE’s success has enabledMrHo toexplore gamingdevelopments from Siberia to sunny Spain, mainly through Hong Kong-listed Melco International Development, parent company of his MLE group and his principal investment vehicle. It’s where it all began for him. The youngest of five children and the only son of Stanley Ho and his second wife, Lucina Laam, he took a degree in commerce from the University of Toronto and returned to Hong Kong, where his eldest sister Pansy, 14 years his senior, was already making her mark, and where he acquired a venerable and money-losing concern called Macau Electric Lighting Co. (the origin of the Melco name). He rebranded it and turned its focus to leisure, hospitality and gaming and has never looked back. Melco International hooked up with Mr Packer in 2004 to create Melco Crown, then known as Melco PBL Entertainment, which they took public on Nasdaq in 2006. Mr Ho at that point had opened the first of his Mocha Clubs machine gaming venues in Macau (Mocha would be folded into the joint venture), and in December 2007, Melco PBL opened its first casino, the 38-story, VIP-focused Altira Macau (Crown Macau as it was known then), with a sub-concession purchased from Wynn Resorts for a whopping $900 million. But Crown Macau wasn’t the end game. It would be two more years before the sub-concession justified its cost with the June 2009 opening of City of Dreams on Cotai, and it did so in a big way. CoD encompasses 668,000 developable square meters, it cost $2.4 billion to build, and it was critical to Melco Crown’s ability to diversify beyond VIP and into the high-limit, high-margin mass-market and premium-mass segments that were only beginning to flower at the time. City of Dreams was one of the casinos that nursed them with three global hotel brands—Grand Hyatt, Hard Rock and the Forbes 5-star Crown Towers—and an array of non-gaming attractions that include three pools, 70 retail shops, 20 restaurants and bars, the city’s largest nightclub and its only successful production show to date. Today, City of Dreams drives 75% of MCE’s revenues. It’s the model MCE is taking to Manila, which also will feature a Crown Towers, not to mention Nobu’s first hotel in Asia, and the one Mr Ho and his team will look to refine further on Cotai with the scheduled opening next year of MCE’s $2 billion Studio City. There are also plans to add a unique restaurant and entertainment precinct at City of Dreams, and in 2017 a fifth hotel tower will open at CoD. Last year, Mr Ho formed a consortium called Summit Ascent Holdings to grab first-mover advantage in Russia’s Far East with a boutique casino near Vladivostok on the Pacific Coast targeting the north China market. Melco International separately holds 5% of the project. Last month, he served notice of his designs on Europe with an announcement that Melco International subsidiary MelcoLot had bought a stake in a proposed megaresort complex near Barcelona called BCN World. Hong Kong-listed MelcoLot is 43.9% owned by MID and one of the linchpins of the broad strategy of diversification Mr Ho is pursuing under its umbrella. MelcoLot distributes products and systems to China’s Welfare and Sports lotteries and also operates a chain of lottery retailers in the country. MID formed MelcoLot in partnership with Firich Enterprises, a Taiwan technology company that is also a partner with Summit Ascent on the Russian casino. Global lottery giant Intralot is MelcoLot’s second-largest shareholder, and together they’re part of a consortium that also operates South Korea’s National Welfare Lottery. MID also owns 38% of Nasdaq-listed Entertainment Gaming Asia, which started life as Elixir Gaming Technologies distributing and operating machine games in East and Southeast Asia. It has since opened two small casinos on Cambodia’s border with Thailand (one of them a money-losing venture that was sold off earlier this year) and bought a precision-plastics manufacturer that moved into gaming chips and table game accessories. Along the way, Mr Ho has piled up the accolades, from FinanceAsia magazine and Corporate Governance Asia magazine, and he enjoys the prestige of a seat on the National Committee of the Chinese People’s Political Consultative Conference. Last October, he shared the stage with Vladimir Putin as a guest speaker at VTB Capital’s fifth annual “Russia Calling!” Investment Forum in Moscow. Forbes pegs his net worth at US$2.1 billion.