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In 2002, Stanley Ho lost his gaming monopoly in Macao, after almost fourteen years of unshared domination. Everyone predicted a black future for him and imminent collapse under the constant blows from American competition, which came well armed from the Las Vegas strip. But economic history is full of certainties.... which have collapsed. Mr. Ho gives us a shining example of this.

Las Vegas in the China Sea
The American armada didn't take long, with a multitude of casino openings: Las Vegas Sands (LVS) started the ball rolling with the Macau Sands in 2004  two years before Steve Wynn did the same by investing 1.2 billion dollars in the Macao Wynn. Sheldon Adelson, boss of LVS, not to be beaten, released 2.4 billion for the MacaoVenetian hotel-casino in 2007, to which a complex of 6,400 bedrooms was added. Finally, a few months later MGM Mirage launched the Macau MGM Grand for 1.3 billion, while in partnership with Pansy Ho, daughter of the venerable Stanley.

The writing was on the wall: the strip would extend from Las Vegas into the heart of the ex-Portuguese colony and the Ho empire would silently collapse. Besides, all the Nevada groups were paying sky high prices for sites in the centre of the island where they created an exact copy of the Las Vegas boulevard of dreams.

Experience wins out
Except at the same time, Stanly Ho, from the height of his 87 years, was probably watching all of this agitation with amusement. For he held the ace: his perfect knowledge of the habits of the Chinese gambler.
Most of the 22 million annual visitors spend on average one day there and then return to the mainland. And when they come it's only to play and nothing else.
Rather than buying highly priced central sites, Stanley Ho judiciously bought up the places near to the landing stages on the south of the island to install his new casinos. Without adding any over the top or hotel-type “side lines”.

The result was, Stanley Ho saw his part of the market increase from 26% in 2008 to 30% in the first quarter of 2009. At the same time- and it's not due to the economic crisis- the shopping centre in the Grand Canal (LVS) remained almost deserted and a small handful of players bet their yuans in the Four Seasons casino, which also belongs to LVS.

Learning from one's adversary
But Stanley Ho's wisdom doesn't stop there. This man also knew how to take what was potentially good in the new arrivals' strategy. Adapting to a mass clientele, les compulsive than its former players, SJM opened the Grand Lisboa in 2007, followed a while ago by an adjoining 400 bedroom hotel, based on the Las Vegas model with bright and welcoming open spaces, far from the smoke filled dens, which made his fortune.

And there also, the leading player, did better than his role models: 40% of his income comes from this mass consumption, compared to an average of 25 % for his “made in the USA” rivals. A happy position for SJM: the Chinese government has just put in place repressive laws against citizens who come to the island to gamble 100,000 dollars or more in a day. In reality the new mass consumers pay this little attention.....

What does the Ho family discuss at mealtimes?
Certainly Stanley Ho hasn't been spared by the economic crisis. But despite a drop in sales and revenue, he seems to be well armed to resist the storm, while the American groups are sometimes almost  forced into bankruptcy by unbelievable debts.

And  new competition doesn't scare them. The australian, James Packer, is preparing to open a new 2.1 billion dollar casino in Cotai. In this undertaking, he is assured of the partnership of one who knows the sector well... Lawrence Ho, Stanley's son.

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