LAWRENCE HO



Macau's Crown prince

Lawrence Ho, son of casino magnate Stanley Ho, comes into his own

Its hard to find a more unlikely heir to a gaming empire than Lawrence Ho. Dressed in an impeccably cut suit, stiff collar and black tie, he looks more like a young banker - which indeed he was once. Yet, as Stanley Ho's eldest son, he is indeed the heir apparent. Arguably even more so than his elder sister Pansy, if only because his father, sometimes known as Macau's King of Gambling, seems intent on seeing the younger Ho learn the business from ground up. So far, Lawrence Ho has not disappointed. He is the CEO of Nasdaq-listed Melco Crown Entertainment which just opened the US$2.1 billion City of Dreams casino resort in Macau.

'When I started building Melco nine years ago, we had just 10 people. Now this has grown to 10,000 people,' he says with obvious pride.

But there is also a hint of surprise and glee in his voice, possibly at the thought of having achieved so much so quickly. He is after all only 32. 'We grew from one little Mocha machine at Hotel Royal,' he adds. The eighth Mocha Club has since opened bringing the total number of gaming machines to over 1,300.

His foray into the industry began back in 2003 after Stanley Ho lost his 40-year Macau gaming monopoly in 2002.

Lawrence Ho bought Melco, a family-held distressed asset listed on the Hong Kong exchange, in 2001. This was before stints at Jardine Fleming, Citibank and online stock-trading platform iAsia. 'I jumped out during the IT bubble like many of my fellow investment bankers,' he says.

When he took over Melco, it only had interests in Jumbo Floating Restaurant. But using the company as a platform for growth, he launched Mocha electronic gaming machines in surroundings that were more akin to a cafe than a gambling den. The move went against the prevailing gambling trends which focused on table games like baccarat.

Electronic gaming may have been a new concept but the Mocha Clubs arrived at a time when Macau was undergoing a transformation itself, from a gambling outpost frequented mainly by mainland Chinese to an international resort hub. Fortunately for Mr Ho, it was the right product at the right time and the success of Mocha Clubs (albeit a small one) emboldened him to take on the challenge of developing a hotel and casino, the Altira which opened in 2007.

As the son of Stanley Ho, starting a casino might not seem like a big challenge. However, Mr Ho is determined to distance himself from his father. 'I have never been part of any of my father's organisations. He has taught me many things but I have never actually worked for him per se,' he says, again with obvious pride.

Distancing himself from his father also seems to have been a pragmatic move. It has long been alleged that Stanley Ho has connections with criminal underworld involving money laundering and prostitution. And until recently, Stanley Ho held a significant stake in Melco.

However plans to list his own casino company Sociedade de Jogos de Macau (SJM) on the Hong Kong stock exchange in 2007 forced him to pare his stake in Melco down. Separately, Melco's potential partner for the Altira, Australia's PBL was also facing some probity obstacles in Victoria and Western Australia where it operates casinos. This was over plans to operate a casino in Macau with links to Stanley Ho. Eventually, the joint venture that became Melco Crown Entertainment had to spend US$900 million to buy their own casino licence, instead of operate under a sub-concession from Stanley Ho.

The contender

It was not the first time Stanley Ho's alleged connections with the criminal underworld created a road block for him and his family. Most recently, the New Jersey Association of Gaming Enforcement in the US raised objections about MGM Mirage's Macau joint venture with Pansy Ho. Ms Ho is managing director of Shun Tak Holdings Ltd, a company controlled by Stanley Ho with an indirect stake in SJM Holdings Ltd.

One might expect Mr Ho to get a little testy at the mention of his family's travails but he remains upbeat. 'I am very transparent,' he adds.

On his sister's issues with the New Jersey Association of Gaming Enforcement, Mr Ho says: 'My sister and I operate differently,' adding that Pansy Ho has 'close ties with SJM and Shun Tak'. 'I have always been independent,' he says.

For good measure, he adds that he has gone through probity checks in various international gaming jurisdictions and come out with 'flying colours'.

He is more reverential when it comes to his father: 'My father's history and reputation speaks for itself. He has probably helped fund every single infrastructure project in Macau over the last 40 years. He is a very proud person and I think it's very unfortunate that his name is being dragged in the mud through this whole process because at the end of the day, I don't think he has any intention to invest in New Jersey.'

In such a tightly knit family, it is hard to say where the influence of one man begins and that of another ends.

But gaming is a high stakes industry, where reputation is everything. And slowly, Lawrence Ho is building his own.

It was a clever manoeuvre that saw Melco Crown Entertainment secure the services of certain junket operators to help turn the fortunes of Altira, that made the industry sit up and take notice.

The manoeuvre in question took place after the Altira opened to less than enthusiastic reviews and dismal gaming revenues to boot. 'It was awful,' remembers Mr Ho.

Then a deal was struck between Melco Crown Entertainment and a Hong Kong-listed gaming company, Amax Entertainment to ensure that it would supply Altira with high-stakes VIP clients exclusively in return for higher commissions for its junket operators. While the deal does certainly bear the stamp of Ho senior, it was the younger Ho who outplayed industry veterans. 'It was really a junket aggregate model with operators working under one team. But what we did together with Amax was very innovative for its day,' explains Mr Ho modestly.

A constant flow of VIP clients quickly turned Altir

a into the leader in Macau in terms of VIP market share, sparking a junket commissions war in the process. And Lawrence Ho had become a contender. With City of Dreams, Melco Crown Entertainment is now in the same league with Las Vegas Sands, Wynn, MGM and SJM.

Directly opposite the Venetian Macau, City of Dreams is almost as big with a 420,000 sq ft casino and 2,200 hotel rooms. It is certainly more hip with rock memorabilia like Madonna's black satin bustier and Ozzy Osbourne's sequined get-ups oozing out of the walls at the Hard Rock Hotel. But hip or not, the success of City of Dreams still has to be proved.

In concept, City of Dreams is a little more sophisticated than most Macau casino resorts, abjuring the thematic glitz many associate with the industry. Instead the premises, which comprises Crown, Grand Hyatt and Hard Rock hotels exude a more urban chic that might be more comfortable in the context of Hong Kong. 'At the core of what I am trying to do is build a new generation resort,' explains Mr Ho. 'What I have tried to do here is to serve different segments of market within one property.'

Melco Crown Entertainment, along with all the other operators in Macau, are acutely aware that they have to grow the market, now that the SAR is close to saturation point. Las Vegas Sands hopes to do this by offering Asia and the world a new exhibitions and conventions destination on the Cotai Strip.

Lawrence Ho wants to attract a new generation of gamers. But unlike in the US, these younger, recreational gamers do not really exist yet. And growing this new segment of the market may take some time, depending as much on cultural mores as it will on the global economy.

Still, Lawrence Ho has a lot of time and is in no rush to become the next 'King of Macau'. Asked if he sees himself as one of the big boys, he replies humbly: 'There are so many icons in this industry, Steve Wynn, Sheldon Adelson, Kirk Kerkorian, my father.' For now, he is not interested in titles. He simply wants to 'buckle down' to work and deliver shareholder value, he says. 'Hopefully, someday I won't have the egos of some of them,' he adds

LAWRENCE HO

  • Chairman and chief executive officer of Hong Kong-listed Melco International Development Ltd
  • Co-chairman and CEO of Melco Crown Entertainment (Macau) Ltd, a Nasdaq-listed company owning one of only six gaming concessions and sub-concessions to own and operate gaming business in Macau
  • On the Board of directors of The Community Chest
  • Chairman of The Chamber of Hong Kong Listed Companies
  • Best CEO in the Conglomerates category by Institutional Investor for 2005
  • Directors of the Year Award 2005 by the Hong Kong Institute of Directors
  • 5th China Enterprise Award for Creative Businessmen in Beijing and named 'Leader of Tomorrow 2005' by Hong Kong Tatler
  • Graduated from the University of Toronto Canada in 1999, and holds a Bachelor of Arts degree, majoring in commerce

He may be slight in stature but Lawrence Ho is not intimidated by the big boys of Macau. Speaking at the opening of City of Dreams recently, he said: 'We look forward to welcoming new developments to Cotai, but we are confident that many will quickly realise that the centre of gravity for our industry has already firmly shifted south, to us here in Cotai.'

This tough talk probably has something to do with having to face giants from an early age.

Taken out of his element in Asia as a child, he was educated in Toronto, Canada from the age of nine. He went to high school at Upper Canada College, where he met his future wife, Sharen. Later, he graduated from the University of Toronto in 1999 with a Bachelor of Arts degree, majoring in commerce.

Along the way, he picked up ice hockey, a Canadian rite of passage in the same way the American football is in the US. Ice hockey, however, is a notoriously more vicious.

Of course, if all this was not training enough, Lawrence Ho is also part of a large extended family, just one of Macau kingpin Stanley Ho's 17 children from four wives.   - 2009 August 8   BUSINESS TIMES

 


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