Inside Asian Gaming

INSIDE ASIAN GAMING APR 2019 30 IN FOCUS Back in 2001, when the decision to award three gaming concessions was first announced, Macau’s annual gaming revenue was US$2 billion – well below today’s numbers but remarkable nonetheless for a territory of just 435,000 people at the time, and almost all of it controlled by Dr Ho. Adelson’s influence, via Las Vegas Sands and its local subsidiary Sands China, has been the most strongly felt in the 18 years since 2001. One of the six companies granted either a concession or sub-concession to operate casino gaming following the transfer of Macau’s sovereignty from Portugal to China in 1999, it was the opening of Sands Macao in 2004 that truly set the SAR on the path to becoming the world’s premier gaming hub. Sands Macao completely altered global perceptions as to what Macau could be. Quickly brushing aside concerns that a Las Vegas-style casino would never work on the other side of the world, it is now part of Macau folklore that a crowd of 40,000 people literally broke down the doors (16 of them in total) on opening day at Sands Macao – a relentless rush that saw the company recoup its US$265 million investment in just nine months. It was also Adelson who recognized the potential of a 6.7-square kilometer mudflat known as Cotai, developing the concept of the Cotai Strip and leading the charge with construction of the world’s biggest casino, the Venetian Macao, in 2007. Today, the Cotai Strip is the heart and soul of Macau’s casino industry with nine integrated resorts in operation and a 10th due to open by the end of the year. Sands China runs four of them. Despite these contributions, the ailing health of Adelson and Dr Ho – particularly with their current 20-year gaming concessions coming to an end in 2022 (the licenses of SJM and MGM were recently extended by two years from 2020 to align with the other four) – inevitably raises questions as to what their companies will look like once departed. In the case of SJM, keen observers couldn’t help but ponder the timing of a bold power play by Pansy Ho – Co- Chairperson and Executive Director of MGM Holdings and one of Dr Ho’s five children to second wife Lucina Laam – when she announced in January an alliance to take control of STDM just weeks before her father’s reported ill-turn. The alliance between Pansy Ho, three other companies controlled by her (Shun Tak Holdings, Lanceford Co Ltd and Interdragon Ltd) and The Fok Foundation took their combined interest to 53% of issued shares in STDM, which in turn holds a 54% stake in SJM Holdings. SJM is the holding company for Sociedade de Jogos de Macau, S.A. – one of the six companies to hold a Macau casino concession or sub- concession. It has long been speculated that Pansy Ho would one day move for control of SJM, having been a key figure in the uneasy truce that stalled a previous dispute over control of her father’s estate. After Dr Ho underwent brain surgery in 2009 following a serious fall in his home – he now receives full-time care in Hong Kong – it was Pansy Ho and her four full siblings, who include current SJM Chairman Daisy Ho and Melco Resorts Chairman and CEO Lawrence Ho, that engineered a deal to transfer shares in companies controlled by Dr Ho their way. The move was initiated shortly after Dr Ho had gifted his fourth wife, Angela Leong, a 7.03% stake in SJM in December 2010, making her the company’s second largest single shareholder at 7.63%. Amid a litany of legal challenges, claims and counter-claims that threatened to spiral out of control, the family truce – said by some to have been engineered by Beijing – was finally agreed in 2011 and saw