Photo: Bloomberg Photo By Paul Yeung.
In Macau, the world's largest gaming hub, few family business dynasties are as powerful as the clan led by patriarch Stanley Ho. Or as a complex: Tycoon 97, the father has 17 children with four women he calls his wives.
Now, a branch of the exuberant family consolidation, just as SJM Holdings is preparing to restore its casino license and is facing a serious challenge from Las Vegas rivals, has built glitzier resorts in Macau.
The rise of the gaming enclave is one of the more dramatic stories in Chinese business. He built the Chinese city's first casino in 1962 and became a billionaire from his 40-year-old monopoly there. Over the decades, the Ho-family drama has been characterized by sudden changes that have made SJM – and succession planning – a difficult business.
In recent weeks, the children from wife # 2, Lucina Laam, threw an alliance with another group of shareholders – Hong Kong's influential Fok family – to get the vote over the board. Now, the concentration of power in a single branch of the family, backed by another Chinese empire's staple, can increase business as they seek permission to continue operating in Macau's $ 38 billion game industry a year .
The effort is high: SJM is one of Asia's oldest gaming companies and still controls the largest number of casinos in Macau.
"Alliance shareholders all have irreplaceable goodwill, accumulated through long-term understanding and exposure in various industrial sectors in Macau and China." Daisy Ho, SJM's president and one of Laam's daughters, said in his first interview since the pact was announced on January 23.
The members of the alliance have interests in retail, hospitality, conferences and travel services, she said. "Together with Timothy Fok, co-chair of SJM, we can leverage and utilize these resources to further develop SJM's competitiveness to pursue the new gaming franchise."
In the 1960s, Stanley was a reputation entrepreneur in Hong Kong as a charismatic broker. He and a group of businessmen won the first license to set up a casino in Macau, a ferry trip from Hong Kong. Among his partners was Henry Fok, Timothy's father. The city was still a Portuguese colony, and prostitution and gang wars were common in the street. But as the Chinese economy opened up and the population grew richer, players played too high stakes.
The Ho Empire controlled Macau's economy almost for decades, and its basic families continued to have a huge complaint. Stanley became one of Hong Kong's richest men. When Henry Fok died in 2006, China's official Xinhua News Agency called him "a close friend of the Communist Party." Timothy, 73, has been a member of the Chinese People's Political Consultative Conference, an advisory body in China.
Macau's market was opened in 2002, shortly after the city was handed over to China after more than 400 years of Portuguese rule. Licenses – called concessions – were published by the municipality. Of the six large companies operating there, SJM and MGM China Holdings Ltd. expire. concessions in March 2020. Those of Sands China, Wynn Macau, Galaxy Entertainment Group and Melco Resorts & Entertainment expire in June 2022.
The new entrants built palace areas, offering entertainment shows and gourmet food. In recent years, they have focused on Cotai, a patch of reclaimed land between two nearby islands, which have since become Macau's version of the Las Vegas strip. No Cotai properties lost SJM customers. It now has only a 14 percent share of the market, not even among the top three, according to Bloomberg Intelligence data.
Analysts say the new alliance will help SJM's business opportunities and it will likely help the company recover a license after expiry. "The reintegration of the alliance's resources with SJM will revive the gaming operator with the gravity needed to move the needle to non-gaming investments, and it will no doubt help it get a new franchise," said Ben Lee, a Macau. based management partner in Asian game consultant IGamiX.
However, some are less sure that children can return to their day of glory.
"I have questions about the extent to which the successors are able to maintain the social and political relations their father had when it was bread and butter from the game industry," said Joseph Fan, Chinese University professor at Hong Kong.
The Patriarch retired in 2010 after a long-term hospital stay. The family has occasionally released photographs showing him in a wheelchair. He no longer speaks publicly or in the media.
After a public feud over his wealth, almost all his farms in SJM were divided among different family members.
So earlier this year, Shun Tak Holdings Ltd. A real estate developer whose largest shareholder is Pansy Ho, the second-oldest daughter of the second wife, announced that she and her siblings would join the Fok Foundation to select the board members of STDM, the largest holding company controlling SJM. 19659012] The Alliance now jointly controls 53 percent of STDM, according to the exchange application. STDM in turn has about 54 percent of SJM.
Optimism about the alliance has driven SJM's shareholding around 15 percent this year. Still, the questions continue, especially about the role of Angela Leong, the fourth wife. A former dance instructor and a billionaire through huge property holdings, Leong is also a co-chairman on SJM's board.
She also has strong positions, including as Macau legislator. So far, the family has not publicly commented on the role she will play in the company in the coming years, and Leong did not respond to requests for comments.
"The other parties involved, especially Angela Leong, also have many interests and many influences in Macau," said Vitaly Umansky, an analyst from Sanford C. Bernstein & Co. "My main concern is that it creates a situation at the company and on the board that leads to a lot of fighting battles, and that causes things to be delayed and operations of the company not working properly?"
Daisy tried to slow down such speculation and say that the board would work together. "Although the alliance is the ultimate controlling shareholder in SJM, no one should make isolated decisions," she said. "My job is to conduct robust discussions and discussions."
Ultimately, the power of the Stanley Ho inheritance may lie in the influence his family has in Macau, even outside of SJM. Daughter Pansy owns a 22.5 percent stake in MGM China, Macau's subsidiary of MGM Resorts.
Lawrence Ho, a son from wife # 2, is CEO of Melco. Daisy said she will continue to lead SJM while Pansy will focus on MGM and Lawrence will focus on Melco. Pansy did not respond to a request for comment.
Lawrence said that while he is a very small indirect investor in SJM through the family association, he has no involvement in SJM's operations and no interest in his business.
"My real passion lies in Melco," he said. "What I have built alone is so much more exciting."