10 Ambrose So
EXECUTIVE DIRECTOR AND CEO
SJM Holdings
CHAIRMAN
Sociedade de Jogos de Macau
POWER SCORE 1,642 LAST YEAR 8
CLAIMS TO FAME
• Joined Stanley Ho’s gaming and tourism business in 1976
• “Responsible for execution of the company’s strategy and the overall management of the company’s business,” according to SJM Holdings annual report
Ambrose So, Stanley Ho’s longtime lieutenant, was thrust into the top job when the founder collapsed at home in July 2009. Following a legend ain’t easy.
SJM continues to prove that a rising tide doesn’t necessarily lift all boats, certainly not equally. Management hopes that finally landing in Cotai with Grand Lisboa Palace can bail out their sinking ship, though analysts increasingly don’t expect the HK$36 billion (US$4.6 billion) integrated resort to open before 2019.
Meanwhile, which casino concessionaire has the newest casinos in Macau? It’s SJM, with its own Casino Taipa at the Regency Art Hotel which opened in November last year down the street from Altira, Jai Alai which opened a month later adjacent to Oceanus, David Chow’s Legend Palace which opened early this year at the end of Fisherman’s Wharf nearest the ferry terminal, and The Macau Roosevelt and Royal Dragon, both of which opened in the second half of this year. All five properties utilize SJM’s gaming concession.
New casinos haven’t proven terribly helpful, though. In the past five quarters, SJM’s market share has fallen from 19.5% to 15.4% in this year’s third quarter, according to Morgan Stanley. Union Gaming expects SJM’s 2017 revenue will be barely half of what is was in 2014, with EBITDA down 60%. Third quarter gaming revenue was flat from a year ago.
SJM still has plenty of firepower. It leads the market with 20 casino locations and 1,650 tables. The company categorizes its products into three segments – flagship Grand Lisboa, “other self-promoted casinos” where SJM also operates the host venue, such as Jai Alai, and “satellite casinos” in third party locations, such as Legend Palace. Only three casinos lie beyond the Macau Peninsula – four if you add mothballed Greek Mythology – and none are in Cotai. That geographic deficiency and a related lack of opportunities for non-gaming revenue – 1.2% of its third quarter revenue, according to Sanford C Bernstein – exemplify SJM’s woes and its old school vibe.
Being the last arrival in Cotai owes to decisions made during the active rule of Dr Ho, whose Sociedade de Turismo e Diversoes de Macau (STDM) won the casino monopoly in 1962 and held it for 40 years. His innovations such as high speed ferries from Hong Kong, dedicated junket VIP rooms and the landmark Casino Lisboa shaped modern Macau. But Dr Ho dismissed foreign operators and Cotai.
That said, when Dr Ho saw that he was wrong about Sands Macao, he built Grand Lisboa, a property that remains competitive in the market with comfortable rooms, an engaging gaming floor and quality food from a deli to multiple Michelin star restaurants. Dr Ho also scaled back the Oceanus project from a US$1 billion makeover of the Outer Harbor to renovating the New Yaohan department store site, packing it with mass tables and machines and wrapping it in the same high tech shell as the Water Cube at the 2008 Beijing Olympics, making gaming patriotic.
Those projects were both completed in 2009, the year illness felled Dr Ho. Whether SJM would have found more creative and effective solutions to its dilemma over these past eight-plus years if he’d still been in charge matters less than finding them in the months ahead.
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