Stanley Ho: The ‘king of gambling’ who built Macau

Vinicy Chan, Daniela Wei
AFP/Getty

Stanley Ho, a one-time kerosene trader who built a casino empire in Macau that propelled the Chinese island past Las Vegas as the world’s biggest gambling hub, has died at the age of 98, members of his family said.

Known as the “King of Gambling”, Ho dominated gaming in the former Portuguese colony after winning a monopoly licence in 1961. His SJM Holdings Ltd flourished as China’s economic opening created a flood of new wealth in a country with a passion for gambling. SJM now controls 20 casinos on an island of about 10 square miles.

“Our four families stand united in our grief and respect for his legendary accomplishments, everything he has done in life for Hong Kong, with Hong Kong, Macau and all his charitable donations,” one of his daughters said outside Hong Kong Sanatorium and Hospital.

SJM shares rallied, after being affected by the announcement of Ho’s death, as investors were optimistic that the four branches of Ho’s descendants – he had 17 children with four women – have a plan in place following a 2019 alliance, despite earlier feuding.

“We are unlikely to see the resurgence of the previous family disagreement as it is believed that a compromise plan has already been in place for some time,” said Ben Lee, Macau-based managing partner at gaming consultancy IGamiX.

When Ho retired around mid-2018, he passed some of the top roles at SJM to his heirs. Daisy Ho, his daughter, became chairman and executive director. Angela Leong, SJM’s second-largest shareholder, whom Ho referred to as his fourth wife, became co-chair with another executive director.

In 2011, a family dispute erupted over Ho’s 32 per cent stake in STDM, which controls the company’s casinos. Ho accused family members of illegally taking control of the stake, naming as defendants Chan Un-chan, whom Ho referred to as his third wife, and five of his children with Lucina Laam King-ying, his second wife. Ho resolved the dispute by giving up most of his stake, with the biggest winner being Angela Leong, mother of his five youngest children.

Still, the succession reopened long-simmering family rivalries. In January 2019, Pansy, his eldest daughter with his second wife, joined forces with some siblings in an alliance that holds sway over a controlling stake in SJM, giving her the upper hand over Leong in the fight for the jewel in the crown of Ho’s $14.9bn (£12.1bn) empire. Pansy, one of Hong Kong’s richest people, is also executive chairman of Shun Tak Holdings Ltd, which runs most of the ferries between Hong Kong and Macau.

The other branches of the family appear to have accepted the arrangement and members of all four groups of descendants went in front of TV cameras together to announce Ho’s death on Tuesday.

Analysts at Sanford C Bernstein said in a note that disputes could arise again after Ho’s death.

“If anything we could see greater infighting between various interested parties,” they wrote, noting that there was little reason for SJM shares to rally given that Ho has been effectively minimally involved in the company since 2011.

Ho’s rise transformed Macau from a commercial backwater into the “Las Vegas of Asia” by exploiting its big advantage over the rest of China – casinos were legal. As his fortune swelled, he expanded beyond the island, building residential and office buildings in Hong Kong. In 1984, he won a license to operate a casino in Portugal and spent $30m to open the Casino Pyongyang in North Korea in 2000.

Ho’s Macau monopoly expired in 2001, two years after China regained control of the island from Portugal. China then granted licenses to competitors, including Sheldon Adelson’s Las Vegas Sands and Wynn Resorts Ltd. Rather than hurting Ho, the increased competition coupled with China’s booming economy accelerated Macau’s growth into the world’s biggest gaming hub and Ho’s fortunes ballooned.

The city’s gaming revenue has become a barometer of the economy of China, where two thirds of its gamblers are from. While casino takings have usually grown with China’s GDP, it plummeted in 2014 when China launched an anti-corruption campaign and again in 2020, after the coronavirus pandemic triggered a 97 per cent drop in revenue as Chinese gamblers were prevented from travel into the enclave.

Ho was born on 25 November 1921, into a wealthy Hong Kong family of Chinese and European descent and attended university in the city. His family’s circumstances deteriorated during the Second World War, when the Japanese invaded the British colony. At age 21, he fled to neutral Macau where he got his start trading everything from kerosene to airplanes, at a time when the island was best known for fishing and producing fireworks and incense.

Ho was an avid ballroom dancer and a former Hong Kong tennis champion. He won the Chinese Recreation Club doubles competition for older players for several years running into his eighties. Ho also carried the Olympic torch in 2008.

In the late 1960s, Ho built Casino Lisboa, which attracted visitors from all over Asia, many of whom were brought in by junket operators working for Ho. In the early days of gaming in Macau, prostitutes and loan sharks patrolled the entrances and triads fought gang wars in the city.

Gaming regulators alleged that Ho’s casinos permitted Asian organised groups, known as triads, to operate within his sites, sometimes by controlling VIP gaming rooms. Ho denied any association with organised crime.

“During the period before the liberalization and the crackdowns on organised crime, anyone involved in gaming was vulnerable to such accusations,” he told the New York Times through a spokeswoman in 2007. “There has been no concrete evidence to back up such accusations,” he said, referring to his own case.

After Ho lost his monopoly to foreign competitors, two of his 17 children formed ventures with them. Pansy teamed up with Kirk Kerkorian’s MGM Resorts International, and Lawrence had a decade-long partnership with Australian tycoon James Packer that ended in 2017.

While Ho cultivated ties with the Chinese government in Beijing, he alienated his sister, Winnie, who was fired as executive director in 2001 after helping run his casinos controlled by Sociedade de Turismo e Diversoes de Macau, or STDM, for 25 years. STDM is the controlling shareholder of SJM, which now holds the casino license.

Winnie Ho filed multiple lawsuits in Macau and Hong Kong to block SJM’s initial public offering in 2008, alleging defamation and challenging the company’s debt and shareholding structure.

Casino Lisboa become the backbone of SJM, which added more than a dozen additional Macau casinos and grew to become Asia’s largest casino operator. It’s the fourth-biggest in revenue terms after Las Vegas Sands Corp’s Macau unit, Galaxy Entertainment Group Ltd. and the local unit of Wynn Resorts Ltd.

“Stanley Ho laid the cornerstone for the casino industry in Macau that now dominates the global landscape,” said Lee at IGamiX.

Stanley Ho, businessman, born 25 November 1921, died 26 May 2020

© Bloomberg

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