Tug Of War For China’s Gambling Empire


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Tug Of War For China’s Gambling Empire

Jan. 29 2011 – 10:45 am | 444 views | 0 recommendations | 0 comments
HONG - Hong Kong tycoon Stanley Ho (C) poses f... Gambling tycoon Stanley Ho Image by AFP/Getty Images via @daylife 

With four wives and 17 children, choosing a successor to take over the sprawling empire and considerable wealth of Chinese billionaire Stanley Ho Hung Sun was always gong to be a dicey proposition. Certainly not something that should be left undecided for too long at the risk of yet another messy family feud splashed across Hong Kong’s tabloids and courtrooms, but it appears that’s where the Ho clan is determined to go. Ho controls more than 30% of the world’s largest casino market that surged 58% last year to $23.5 billion. The VIP market made up of Chinese high-rollers who bet large sums in private rooms reportedly accounts for more than 72% of that revenue.

Macau is the only place in China where gambling is legal, and Ho had a monopoly on the industry that lasted for four decades. Although there’s now five other operators with licenses to run casinos in the southern Chinese city, two of them are joint ventures between his children–Pansy Ho and Lawrence Ho–with foreign operators.

The turning point in the Ho family fortunes was an accident the 89-year-old tycoon suffered in 2009, the details of which were never confirmed but widely believed to have led to brain surgery to remove a blood clot. Since then, the usually charismatic, former ballroom dancer has been confined to a wheelchair and rarely seen in public. Ho’s absence has led to widespread speculation as to who amongst his many wives and children would take over the largest casino empire in the world’s largest market

Ho’s succession plan just started to emerge recently when he began transferring some of his holdings to family members. According to his lawyers Oldham, Li & Nie, Ho was intending to divide his assets equally among the four families until he discovered that some of them had taken it upon themselves to distribute his assets without his consent.

The dispute centers on a private company called Lanceford, which had earlier been wholly owned by the gambling tycoon. Lanceford holds a 31.7% stake of Sociedade de Turismo e Diversoes de Macau (STDM), which in turn controls 56% of Sociedade de Jogos de Macau Holdings (SJM), Macau’s largest casino operator.

It’s not exactly clear how Lanceford was snatched away from Ho, but a statement from SJM on Monday indicates that his third wife, Ina Chan Un-chan, now owns a 50.5% stake, while the remainder is held by the children of his second wife, Lucina Laam King-ying: Pansy, Daisy, Maisy, Josie and Lawrence.

Immediately after the share transfer was revealed, various family members and Ho’s lawyer, Gordon Oldham, began issuing a slew of conflicting letters and statements through the media. The battle lines were quickly established with the families of wives No. 1 and 4 aligning against 2 and 3. Most observers see eldest daughter Pansy Ho and fourth wife, Angela Leong On Kei, as the main protagonists behind the dispute. They’re both seen as the two strongest candidates within the family to take over Ho’s helm.

Although a fortune estimated by Forbes at $3.1 billion is at stake and investors’ sentiment may waver in the short term, the eventual outcome is unlikely to have a significant impact on SJM’s operations.

The other shareholders with significant stakes in STDM, such as the Henry Fok Foundation and the Cheng Yu-tung family, are likely to block any changes to SJM’s management that might jeopardize the company’s earnings. Moreover, Pansy and Lawrence would never be allowed by Macau’s regulators to control more than one gambling license.

So the court filings and the press conferences will undoubtedly continue to provide much fodder for the tabloids and the paparazzi, but the ultimate winners may prove to be the family’s lawyers. Perhaps this is why most countries have outlawed having more than one spouse at a time.

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