Lawrence Ho Explains Summit Ascent Sale, Focus on Japan
Lawrence Ho sold his stake in a Russian casino because he wanted to increase his chances of securing a Japanese casino license, the 41-year old CEO of Melco Resorts & Entertainment said in an interview this week. With the sale of Tigre de Cristal out of the way and the Morpheus hotel-casino opened at City of Dreams Macau, Lawrence Ho is ready to focus all his energy on Japan.
When asked by Nikkei about his sell of Summit Ascent Holdings, Lawrence Ho said, “I had high hopes for Russia. If things are more transparent, operate more internationally, I’d love to go back one day, assuming Russia is not enemies with the country that I want to be in.”
Ho sold his shares of Summit Ascent Holdings, the parent company of Oriental Regent. In turn, Oriental Regent is the owner of Tigre de Cristal, a Russian casino in the Primorsky Krai administrative district.
Tigre de Cristal was built near Vladivostok to take advantage of potential VIP high-rollers from northeast China.
Tigre de Cristal Sale
The investment never turned out the way Lawrence Ho would have wanted. On HK$470.8 million in revenue from the casino last year, Summit Ascent generated HK$13.8 million in profits. With a new punitive Russian tax law set to go into effect, those profits would have dropped again this year.
The Melco CEO said, “I did not want to do anything that would jeopardize how Japanese regulators see my other activities. Given that my main focus is Japan…I said let’s quickly clean that up.”
Ditches Russia, Focuses on Japan
Russia is a relatively unregulated casino market, unlike the Japanese niche. Melco Resorts did not want to be associated with an unregulated market. If Japanese regulators sensed any irregularities, they could choose a more transparent Chinese or American casino company.
Lawrence Ho said his main focus is on Japan. He travels to Japan every other week to work on his dream of building a casino in Osaka or Tokyo. Melco’s chief executive, son of the legendary Stanley Ho, said he would move Melco’s headquarters to Japan if he collects a casino license.
Lawrence Ho on Japan
In an interview with Nikkei, he said, “Rarely do you find a first-world country like Japan with the infrastructure, tech and people already in place, yet the potential still so big. Japan is where we spend the most time these days.”
Melco has taken other steps to assure a casino license. Last month, the NASDAQ-listed company introduced MelGuard, a facial recognition and fingerprint recognition software Ho plans to implement in the Japanese casino market. Given Japan’s regulator’s concerns with policing resident Japanese casino activity, it is designed to assuage concerns among officials.
$10 Billion Japanese Casino
Most of all, Lawrence Ho has pledged to invest up to $10 billion in a Japanese integrated casino-resort. That is the going price, since Las Vegas Sands‘ Sheldon Adelson and MGM Resorts Jim Murren have made similar pledges. Mark Frissora of Caesars Entertainment has made visits to Japan, building support for his company’s bid.
None of them will think bigger than Lawrence Ho. He once suggested he would spend “whatever it takes” to secure a Japanese casino license. When his Studio City casino opened in Macau in 2015, he paid $70 million to produce a short film about the grand opening. The film starred Leonardo DiCaprio and Robert DeNiro and was directed by Martin Scorcese — all to hype his casino’s opening night.
Morpheus at City of Dreams Macau
This month, Lawrence Ho is debuting Morpheus — the kind of development he wants to build in Japan. Morpheus is an expansion of the company’s flagship resort, City of Dreams Macau. Morpheus has an audacious look, sporting a ultramodern exoskeleton around the central tower.
When asked about his latest attraction, Ho said, “Morpheus is a love letter we send to Macau and China. We want to build a landmark for Macau, not just boxes and bricks….We want to show Japan what we can contribute to local culture and the local market using our track record in Macau.”