Fri, Feb 22, 9:27am by Staff Writer
Macau’s gambling hub is known for its flashy casinos and bright lights, but also a powerful family dynasty.
97-year-old Stanley Ho is the patriarch of SJM Holdings Ltd and trouble is brewing among his 17 children about who has a controlling interest in the company.
Ho became known as the ‘king of gambling’ after he build Macau’s first casino in 1962.
He became a billionaire from his 40-year monopoly in the city but over time, his tricky family life have made succession planning a tricky business.
In recent weeks, the children from his second wife, Lucina Laam, have forged an alliance with another group of shareholders – Hong Kong’s influential Fok family – to gain voting control of the board.
Now the concentration of power in a single branch of the family, backed by the might of another Chinese empire, could boost business as they seek permission to continue operating in Macau’s $53 billion a year gaming industry.
SJM is one of Asia’s oldest gambling businesses and still controls the largest number of casinos in Macau.
“The shareholders in the alliance all possess irreplaceable goodwill, accumulated through prolonged understanding and exposure in various industry sectors in Macau and mainland China,” Daisy Ho, SJM’s chairman and one of Laam’s daughter, said in her first interview since the pact was announced on January 23.
Members of the alliance have interests in retail, hospitality, conferences and travel services, she said.
“Together with Timothy Fok, who is co-chairman of SJM, we can leverage and apply these resources to further develop SJM’s competitiveness to pursue the new gaming concession.”
In the 1960s, Stanley Ho was a Hong Kong entrepreneur with a reputation as a power broker with charisma.
He and a group of businessmen won the first license to set up a casino in Macau, a ferry ride from Hong Kong.
His partners included Henry Fok, Timothy Fok’s father, according to The Sydney Morning Herald.
Macau was still a Portuguese colony with prostitution and gang wars common on the streets.
— CasinoOrg (@Casino_Org) February 21, 2019
As the Chinese economy developed and its population became wealthier, gamblers started to pour in.
The Ho empire is valued at $8.4 billion and has controlled the economy of Macau for decades.
Macau’s market opened in 2002, soon after the city was handed back to China after 400 years of Portuguese rule.
Licenses – referred to as concessions – were given out by the local government.
Of the six big companies operating in Macau, SJM and MGM China Holdings Ltd’s concessions expire in March 2020. The remainder expire in June 2022.
Operators have plenty of reason to be excited about the prospect of license renewals after a bumper 2018 in Macau.
Gambling revenue in Macau grew 14 per cent in 2018 according to data released by the city’s Gaming Inspection and Coordination Bureau.
December was the 29th consecutive month where revenue in China’s only legal gambling hub increased versus the same month a year prior.
The city’s accumulated gross gaming revenue for the 12 months of 2018 stood at US$37.57 billion.
It marks the second year of growth after a 19.1 per cent increase in 2017.
This came after three years of annual decline, highlighted by a 34.3 per cent slip in 2015.
The 16.6 per cent year-on-year increase noted in December figures exceeded the expectations of several brokerages covering the Macau casino sector, with growth expected to be between 10 and 15 per cent year-on-year.
Brokerage Union Gaming Securities Asia Ltd said in a recent statement that it expected a “slow start” to 2019.
“As we look into first quarter 2019, and contemplate the timing of Chinese New Year, we would not be surprised if January was flattish and February was up in the mid/high single digits,” Grant Govertsen said.
He added: “For the whole of the first quarter 2019 we are forecasting a gross gaming revenue increase of 4 per cent.”
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