Macau’s king of gambling and the triads

Last week New Jersey’s Division of Gaming Enforcement caused wave of sorts in gambling circles when it openly accused Stanley Ho of having strong links to organised crime, and that any US casino with ties to Macau’s gambling king would jeopardise their State gambling license.

The report was written for the Casino Control Commission which was deliberating on MGM Mirage’s fitness to maintain an Atlantic City gaming license, by virtue of their 50% stake in the Borgata Hotel Casino & Spa.

The problem for MGM Mirage as the commission sees it, is that they are in partnership with Ho’s daughter Pansy in a Macau casino venture.  And Pansy is under the direct influence of “unsuitable persons” as the report puts it.  No prizes for guessing who that unsuitable person is.

A large part of Stanley’s unsuitability arises from findings that he has close links with Chinese Triad groups 14K and Sun Yee On, as well as relationships with Russian organised crime and the North Korean authorities.  This report isn’t the first to make these allegations, and they’re not exactly startling.  I mean, you don’t control a virtual monopoly gambling empire for almost 40 years in the largest casino zone in the world (yes, Macau turnover eclipses Vegas) without being ‘connected’ in both very high and very low places.

One excerpt from the report states…

“From the beginning of its efforts to enter Macau, MGM pursued partnerships with persons that it knew were associated with those aspects of gaming in Macau most heavily penetrated by organised crime.”

But why would MGM Mirage, the biggest casino outfit in Vegas want to get into bed with the Ho Family – to the point where it knowingly jeopardises local licenses?  Probably the same reason Australian casino mogul James Packer entered into a joint venture with Stanley’s son Lawrence to build City of Dreams casino in Macau. To get your foot in the door to world’s biggest gaming floor you need to do so through Stanley.  Getting into Macau seems to be the operators’ holy grail and MGM, having missed out on government issued concessions back in 2001 have decided that a Ho JV is more important than an Atlantic City casino license…they’re selling their Borgata stake so they can stay in Macau.

The King of Gambling

Stanley Ho, Stanley Ho, Stanley Ho Hung-sun, 何鸿燊, 何鴻燊, Hé Hóngshēn.  Ho is an almost mythical figure.  For 40 years his company Sociedade de Turismo e Diversões de Macau (STDM) has controlled gambling in Macau, holding the only concession from 1961 to 2001.  In that time money from his casinos helped develop the area into one of the World’s great casino destinations, and he has a finger in just about every pie there, from transport to infrastructure to services and of course everything to do with gaming.

Catch a ferry from Hong Kong to Macau, and chances are it will be one of Stanley’s Turbojets – the largest fleet of high-speed jetfoils in the world.  Go to the horse races in Macau, and you’ll be a guest of Ho- he owns the Macau Jockey Club.  Stay in a hotel there, and again, owning 16 of the 28 casino/hotel properties on the peninsula chances are you’ll be staying in one of his…and if not one of his at least one his family is in some way associated with.

In 2001 his tight grip on gaming in Macau was loosened to some extent when additional concessions were awarded.  Initially 3, now 6 concession and sub-concession holders are able to operate casino properties.  Its a pretty confusing structure, which is summarised well here .

Steve Wynn managed to win a concession and built his Wynn Macau.  Sheldon Adelson holds a sub-concession and has built the Sands Macau and Venetian Macau.  Hong Kong based Galaxy Entertainment owns a concession and has built a handful of casino properties.  The remaining two sub-concessions are held by joint ventures; Melco Crown Entertainment – the James Packer, Lawrence Ho partnership that built the massive City of Dreams, which is apparently still empty apart from its $1 noodle bar; and MGM Grand Paradise Ltd – the MGM Mirage and Pansy Ho partnership that has New Jersey gaming authority’s knickers in a twist.

But despite the entry of foreign corporations, of the 28 casinos operating in Macau today, 16 are owned by Ho, a further 2 are co-owned by his children, and I dare say the remaining 10 answer indirectly to the political sway he exerts in the region.

A very colorful character indeed!