MACAU Feb 14 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have been superseded by the entry of flashier resorts over the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
For SJM Holdings Ltd, 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.
Under the new rules, Macau is only granting gaming tables to
casinos based on their non-gaming facilities - the more
activities they offer to general tourists the more tables they
will be allotted.
SJM responded by allocating 90 percent of its new 70,000
square metre (753,500 square feet) resort to non-gaming
facilities including a wedding pavilion and multi-purpose
Design renderings of the resort depict an ivory-coloured
facade modelled on the palace of Versailles, Chinese motifs such
as imperial gardens of the Summer Palace, and cultural relics
from the 16th and 17th centuries.
The 2000-room Lisboa Palace also includes a 270-room,
six-star hotel by Italian fashion house Versace.
"We are mindful this is a new area we have come into, in
which we compete with the other operators in Cotai," Ambrose So,
the 39-year veteran and chief executive of SJM, told Reuters in
an interview in the company's minimalist offices above the
garishly adorned Casino Lisboa.
"Ten years back the main thing for them (customers) was
really gaming-centric. They just wanted to go to the casino and
were glued to the tables. We have seen there is a gradual
The Lisboa Palace represents a significant upgrade to SJM's
most lavish property, the Grand Lisboa, a 54-story tower shaped
like a lotus flower which remains a Macau landmark 7 years after
QUALITY, NEW EXPERIENCES
The targeted demographic is also vastly different from the
chain-smoking punters who frequent SJM's dimly lit casinos.
"The customer type is looking for more quality,
entertainment and new experiences," So said, adding that the
company was close to finalising a deal with another fashion
house to develop a 270-room hotel.
Until SJM finishes construction in 2017, the company is
likely to continue ceding market share to competitors, analysts
said. Once the sole player, SJM's share has slipped to less than
a quarter of the market.
By the time Lisboa Palace opens, Macau is expected to have a
light rail service and a bridge connecting the tiny territory,
one sixth the size of Washington D.C., to Hong Kong and Zhuhai.
While Ho no longer owns a tangible shareholding in STDM or
SJM, the company still has a huge presence in Macau, with stakes
in everything from luxury hotels to transport services, real
estate and horse racing.
As Macau continues to transform rapidly, SJM looks set to
remain rooted in the vision of its founder. Angela Leong, known
as Ho's fourth wife and former ballroom dance teacher, is also
deeply involved in the business.
"We should always remain authentic and local, preserving our
own characteristics. We really integrate into society. We are a
local company interwoven with society," So said.
(Editing by Stephen Coates)