What’s in Macau’s cards for the future?
TEXT OF STORY
TESS VIGELAND: The gambling capital of the world has recovered from the recession. You thought I was talking about Vegas? Hardly.
In the Chinese territory of Macau, casino earnings surged in August. Operators are dusting off plans for new and even more garish gaming halls. But for all the glee, an air of unease hangs over Macau.
The 87-year-old undisputed godfather of the gambling scene there has been hospitalized for weeks. And the somewhat ghoulish question has surfaced: If and when Stanley Ho departs the scene, what’s next for Macau?
Our China bureau chief Scott Tong reports.
Scott Tong: It’s hard to visit Macau and not bump into Stanley Ho’s empire.
Hop the ferry over from Hong Kong; it’s run by daughter Pansy Ho’s company. Catch the animated light show at Macau’s brand new resort, the City of Dreams; son Lawrence Ho is part owner. In all, Stanley Ho owns 20 of Macau’s 32 gaming houses. The 87-year-old billionaire has seen his share of political change and rivalry. But he’s always stayed on top.
Eric Sautede: He is clearly the equivalent of, I don’t know, Warren Buffet in the U.S.
Macau long timer and political scientist Eric Sautede.
Sautede: With an extra thing that he is a very seductive man. Even when you have a room full of tycoons, he is really one-of-a-kind.
Ho’s original casino from the 1970s helps tell the story. The Lisboa is mostly baccarat tables. No lounge singers, no tiger shows. No frills. Sautede remembers the old days.
Sautede: Very smoky atmosphere, not well ventilated, with old carpets, Russian prostitutes going around.
Ho’s other secret is private gambling rooms. The high-rollers you never see here generate 65 percent of Macau’s fortunes. And from the mid-1960s to 2004, Stanley Ho controlled it all, says Cathy Hsu at Hong Kong Polytechnic University.
Cathy Hsu: He married a woman who helped him to get the monopoly license. And then his second wife has some relationship with organized crime. So he didn’t encounter any major problems in terms of challenging his monopoly.
In 1999, Macau reverted from Portuguese colonial rule back to China. So Stanley Ho shifted his emphasis to mainland gamblers. Then in 2004, his monopoly ended. The American developer Las Vegas Sands opened two casinos, including the famous Venetian.
Others, like MGM and Wynn Resorts, came too. But they stumbled. Hsu says most Chinese gamblers blew off all the nice restaurants and frou-frou hotel rooms.
Hsu: So I think the investment was misdirected.
So Stanley Ho today is still winning Macau’s market share, though he is modernizing.
The Lisboa has cleaner carpets now. Free drinks. And the prostitutes have moved to the basement. And Ho has placed a side bet on that Vegas neon model, which two of his children have invested in.
Eric Sautede figures it’s a smooth succession plan, unless there’s a family feud when Ho dies.
Sautede: In a way it’s even more complicated than the Kennedys for the simple reason that Stanley Ho had four wives. And I’m counting really the official ones.
Plus, 17 children are in the picture. Local columnist and economist Jose Duarte.
Jose Duarte: Then, we have his business associates, they have probably been running most of the company for the last years. Then you have the other shareholders. There are too many variables, too many unknowns here.
Which makes for palace intrigue, with Ho in the hospital. Whatever happens to him, his business record speaks for itself. And not many people here are betting against the godfather’s empire.
In Macau, I’m Scott Tong for Marketplace.
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