Stanley Ho's SJM makes fresh start with new Macau casino
By Farah Master
MACAU (Reuters) - Macau gambling kingpin Stanley Ho helped put the former Portuguese colony on the map 40 years ago with the fluorescent, onion-shaped Casino Lisboa. Now, the pioneer of old Macau is creating a new landmark - a $3.9 billion resort that will be one of the final projects to open on China's booming Las Vegas-style Cotai strip.
The 92-year-old Ho, through privately held company Sociedade de Turismo e Diversões de Macau (STDM), presided over much of Macau's development as a casino city, shielded by a four-decade monopoly on gambling until 2001 when the door was opened for U.S. casino moguls Sheldon Adelson and Steve Wynn.
Built for gambling purists, Ho's seedy, windowless halls have been superseded by the entry of flashier resorts over the past decade. The five other licensed operators have opened non-gaming attractions including grand convention spaces, gondola-filled lagoons and luxury retail plazas. Even so, Ho's 17 Macau casinos still rake in the most revenue each year.
Now home to 35 casinos, Macau is one of the world's fastest growing economies with more than 80 percent of government revenues derived from the gaming industry.
But new regulations forcing casinos to diversify into non-gaming tourism are shaking things up. Over the past two years, Beijing has made clear that the semi-autonomous southern territory needs to balance gambling with more leisure and family-focused attractions.
For SJM Holdings Ltd(0880.HK: Quote), the Hong Kong-listed entity and main asset of STDM, the changes mean its new Cotai resort - introduced as Lisboa Palace at a groundbreaking ceremony on Thursday - cannot rely on the old pure-gaming model.
"SJM's only problem is it has only ever been a gaming company. It is a company so ingrained in gaming that it could be a limiting factor," said Macau-based David Green who heads Newpage Consultancy, an advisor on the gambling industry.
Casino operators' efforts to diversify are likely to be a key consideration in renewing gaming licenses which start to expire in 2020, industry experts said. Secretary for Economy and Finance Francis Tam has said discussions on the renewal process will start next year. Continued...