Pansy Ho Seeks Control of Macau Casino Giant SJM Holdings

Monday, February 11th, 2019 | Written by April Bergman
Pansy Ho Seeks Control of Macau Casino Giant SJM Holdings

Pansy Ho of Shun Tak Holdings announced this week she had made a financial alliance with the Fok Foundation to gain control of SJM Holdings, one of six major casino operators in Macau. SJM was founded by Pansy Ho’s father, the legendary Chinese King of Gambling, Stanley Ho.

Between them, Shun Tak Holdings and Fok Foundation own 53% of Sociedade de Turismo e Diversoes de Macau (STDM). According to a January 23 filing, STDM (which owns 14 of the 30 operating casinos in Macau) owns 54% of SJM Holdings.

With the help of Fok Foundation, established in 1977 by original SJM shareholder and philanthropist Dr. Henry Fok Ying Tung, Pansy Ho should be able to gain control of SJM Holdings. Her plans this time around might be informed by an earlier failure to secure control of her father’s corporation.

This is the second time Pansy Ho has sought to gain control of her father’s corporation. Back in 2011, she led a revolt which forced Stanley Ho to cede control of day-to-day operations to some of his children.

2018 Stanley Ho Retirement

In June 2018, the 97-year old Stanley Ho retired from SJM. That seems to have opened a battle between his children to see who controls the casino company made famous by its ownership of Casino Lisboa in Macau.

As the former gaming executive was admitted to a hospital in Hong Kong, his daughter appeared to be making strategic alliances to secure full control of SJM Holdings during his convalescence.

First though, readers might need a recap.

Macau’s Casino Industry

In 1961, Portugal decided to turn its south Chinese coast colony, Macau, into a casino enclave. Hong Kong businessman Stanley Ho led a consortium which gained a gaming monopoly from the Portuguese government. Casino Lisbao was one of several gaming properties Stanley Ho built in the city.

After the Portuguese handed over Macao to the Chinese government in 1999 (by treaty commitment), the Beijing government decided to make Macau into their own version of Las Vegas. From 2001 to 2004, several casino licenses were handed out.

Creation of the Cotai Strip

Three Chinese companies — SJM Holdings, Galaxy Entertainment Group, and Melco Crown — were given licenses. Three American companies — Las Vegas Sands, Wynn Resorts, and MGM Resorts — also received licenses. The remaining smaller casino operators had sub-licenses under one of the six gaming giants.

Macau’s gaming industry became a phenomenon. All six companies became wildly profitable, as Macau grew from a relative gaming backwater in 2004 to the world’s chief casino destination by 2013. By that year, Macau’s gaming revenues were seven times those of Las Vegas, the second-place casino capital.

SJM Holdings had a bit more instability than the others, mainly because Stanley Ho was aging at a time of extraordinary growth and change. His monopoly over Macau ended in 2002, but Stanley Ho felt he would still control the market until Sheldon Adelson opened the Venetian Macau on the Cotai Peninsula in 2004. Stanley Ho countered with the Grand Lisboa, which put him atop the market again.

A fall at his home in 2009 ended Ho’s resurgence — it and the three brain surgeries that followed effectively ended his business career. His 2009 physical impairment led up to the 2011 battle for control of SJM Holdings that Pansy Ho began.

Angela Leong’s Role

Angela Leong, the fourth wife of Stanley Ho, currently handles day-to-day operations at SJM. Or better put, she shares control of the corporation with Stanley Ho’s children. Leong, a former dance instructor who is 40 years Stanley Ho’s junior, was key to her husband’s strategy in the 2011 takeover bid.

At the time, Stanley Ho fought the takeover by spreading shares of SJM around. Angela Leong received a 6% stake in STDM and an 8% stake in SJM. Together, the two stakes are valued at an estimated US$700 million.

That deal made Leong the largest shareholder in the company. Along with the shares, Stanley Ho arranged to have Angela Leong serve as executive director of SJM for 6 years. Most expected Pansy Ho to wrest control away from her arch-rival in 2017 when the deal expired. Others expected the battle to happen when Stanley Ho died.

March 2019 Takeover Attempt

Now it looks like she’ll strike somewhere in-between. When Daisy Ho, younger sister to Pansy, replaced Stanley Ho as SJM chairman in June of 2018, it was as big victory for the Ho children. Daisy Ho is the CFO of Shan Tuk.

With her sister in the key role and a controlling interest in the parent company, Pansy Ho appears ready to seize control of the SJM board of directors at the upcoming shareholders meeting in March 2019. Karen Tang of Deutsche Bank says SJM CEO Ambrose So, COO Louis Ng, and Angela Leong are likely targets to be replaced at the March meetings.

If so, then SJM Holdings, Casino Lisboa, and Grand Lisboa could be entering a brave new era. Macau’s original casino company has long been in flux, but that may come to an end in the coming months.