Stanley Ho, sometimes called “The King of Gambling” and chairman of Sociedade de Jogos de Macau (SJM) Holdings Ltd. (a casino operator), has transferred most of his 32% stake in SJM’s parent company to relatives of his second and third wives. This recent effort by the aging 89-year-old billionaire to prepare the path for his retirement as his health suffers has raises numerous issues for the holding company which is one of only six permitted to operate casino games by Chinese gambling laws.
With the exception of 100 shares which Ho retained for himself, Ho’s interest in SJM, worth $1.7 billion USD (13.4 billion HKD), was divided with 50/50 between two companies, one belonging to his second wife’s five children and the other to his third wife.
As recently as December 2010, Ho handed the reigns to his fourth wife Angela Leong who took over as managing director since Ho found it “inconvenient” to frequently commute between Hong Kong and Macau. At that time, she received a 7.7% direct stake from him.
Of Ho’s seventeen children, several are occupied in the casino industry, most notably Pansy Ho, co-owner of MGM Grand Macau and managing director of Shun Tak Holdings which runs a ferry from Hong Kong to Macau.
Ho founded Macau’s gambling monopoly and oversaw its growth for forty years. Since the 1960s, this cartel provided nearly 50% of Macau’s government income, but that declined 9.1% in 1999 probably because of internet gambling in China. Shortly thereafter, in 2002, the Chinese government terminated Ho’s domination, allowing Galaxy and Casino Wynn Resorts Ltd. By opening the gambling market to competition, tax revenues saw renewed growth, now providing 70% of Macau’s official revenue.
SJM still operates 4 slot parlors and 17 casinos in Macau, but must now compete against American operators, which now also includes the Las Vegas Sands Corp. Currently SJM is not known to run any online casinos in China since the government won’t license online gambling sites.
Macau is the world’s largest gambling market and the only region in China where gambling is legal. In 2010, revenue exploded to $23.52 billion USD (188.35 billion HKD).