CHAIRMAN AND CEO
Melco Resorts and Entertainment
CHAIRMAN AND CEO
Melco International
DIRECTOR
Studio City International
POWER SCORE: 3,856
POSITION LAST YEAR: 3
CLAIMS TO FAME
- Only operator besides Sands China with frontage along Cotai’s central avenue
- Pledging “whatever it takes” to win Japan integrated resort license
- Lone Macau operator present in the Philippines with City of Dreams Manila
- Creator of the unique Macau attractions House of Dancing Water and Morpheus Hotel
It’s been a difficult year across the gaming industry, and more difficult for Melco Chairman and CEO Lawrence Ho than for most. In May, his father, the renowned Macau casino magnate Stanley Ho, passed away at age 98 following the 2009 brain injury that effectively ended his business career. The younger Ho eventually left an investment banking career to enter the gaming business – the very business his father had been a pioneer in for many decades. However, a different remnant of Lawrence Ho’s past has had the biggest impact on Melco lately.
Originally a satellite casino operator under SJM Holdings’ gaming concession, Melco formed an alliance with Australian billionaire James Packer. The death of Kerry Packer, a legendary gambler and media magnate turned casino investor, left his son as principal owner of what is now Crown Resorts, widely acknowledged as Australia’s leading casino operator over the past two decades. Lawrence Ho and Packer formed a joint venture that became Melco Crown, and in March 2006 it spent US$900 million to buy the Macau gaming subconcession granted to Wynn Resorts. That December the venture listed on the Nasdaq.
Though the principals each held the title of co-chairman, Ho led the parade. In 2007, Melco Crown opened its first property, Crown Macau, now Altira. Then came City of Dreams in 2009, across the street from Sands China’s Venetian Macao at the head of Cotai’s central artery. Melco Crown extended the City of Dreams brand to Manila at the end of 2014. It acquired 60% of Macau’s long-stalled Studio City project, opening a US$3.2 billion Cotai bookend to City of Dreams in October 2015.
A year later, 19 Crown employees were detained in China, charged with illegal gambling promotion. In December 2016, Crown reduced its share of Melco Crown and in May 2017 sold the rest, ending what Ho called, “the most successful partnership in gaming history.” In March 2018, Packer quit Crown, citing mental health issues.
Despite his exit, Packer owned 46% of Crown, and early last year, Wynn Resorts briefly explored purchasing part of his stake. Alerted to Packer’s desire to sell, Ho swept in. In May 2019, Melco announced it would buy 19.99% of Crown from Packer in two tranches for US$1.26 billion, with the goal of potentially taking over the company. In addition to adding market leading assets and geographical diversification, Ho wanted the Crown acquisition to prove Melco could pass regulatory muster in a blue ribbon jurisdiction, to advance his top priority, a “whatever it takes” effort to win a gaming license in Japan.
In 2014, while still partnered with Melco, Crown proposed an AU$2.2 billion (US$1.6 billion) Sydney casino hotel project now under development. New South Wales approved the project, in which Melco had no role, but specifically barred involvement by Stanley Ho, even though he was no longer active in business, if not virtually incapacitated.
Melco’s initial 9.99% stake in Crown got caught up in renewed scrutiny by the state’s Independent Liquor and Gaming Authority, including hearings from January stretching into October, largely arising due to negative Australian media coverage of Crown Resorts. The hearings were, to put it mildly, a PR disaster for Crown.
Melco abandoned the takeover plan, and in April sold its Crown stake to Blackstone Group, according to its Hong Kong Stock Exchange filing, to support “core operations” and strengthen its balance sheet amid the COVID-19 pandemic. Melco lost US$235 million, equivalent to a year’s profits, on the deal.
The unfortunate misstep with Crown may eventually turn out to be a blessing in disguise, given the effect of Covid-19 on the global IR industry. It may also allow Melco to focus in 2021 on its ultimate prize – winning one of three highly coveted IR licenses in Japan.
For the full list of 2020 Asian Gaming Power 50 winners, click here.
