Macau’s foreign-owned casinos have failed to capitalise on SJM’s troubles
The battle among the Ho family over control of STDM and SJM was arguably a perfect opportunity for Macau’s foreign casino operators to forge new and stronger relationships with Macau junkets—the people who deliver nearly 80% of the territory’s gaming revenue. It’s an opportunity that appears to have been squandered.
Industry sources told Inside Asian Gaming there had been genuine fears over at SJM that the current power vacuum and uncertainty over the STDM/SJM leadership would strengthen the hand of the foreign operators when dealing with the junkets.
“It’s been interesting to see the courtship dances going on in the background during the SJM leadership saga,” said one source.
“SJM has certainly been aware that rival operators have been approaching SJM junket partners to see if there were opportunities to work together,” the source added.
That in itself isn’t so surprising. Any period of leadership transition—either in business or politics—is a time of uncertainty. Junkets doing well under the regime of Dr Stanley Ho want to know if they will continue to do well under the new regime or whether they will have their terms of business significantly altered when a new management comes in. Given that Dr Ho has been fronting STDM and latterly also SJM for a total of half a century, no one currently active in the Macau gaming industry has ever known anything else. A new leadership at STDM/SJM could really be a leap in the dark for the junkets.
Recent events at Sands China, Las Vegas Sands Corp’s local unit, have, however, acted as a sharp reminder to Macau junkets of the regulatory complications that can go with working with the US-listed and US-regulated operators.
The close-knit Macau junket community is said to be alarmed in particular by reports that two US Federal bodies—the Department of Justice and the US Securities and Exchange Commission—are investigating the Macau operations of Sands China. The 19th century reactionary and British prime minister Lord Salisbury believed that good government flourished in secret. Something similar could be said about junkets’ attitudes to VIP gaming in Macau.
“It certainly doesn’t make it any easier for LVS to develop its relationships with Macau junkets if those junkets think a federal body [the DoJ] that has previously accused Stanley Ho of triad links is looking at LVS—even when it’s an unrelated matter,” said a source.
Michael Leven, the acting Chief Executive of Sands China, said in an interview with the Macau media at the beginning of this month he thought the involvement of the US authorities in Sands China’s business was directly attributable to allegations made by former Sands China CEO Steve Jacobs in a wrongful dismissal suit in the US. Mr Jacobs, who was sacked in July last year, has been described by LVS as “a disgruntled former employee”.