Inside Asian Gaming

inside asian gaming september 2016 16 Asian Gaming POWER 50 2 0 1 6 More than ever, Lawrence Ho stands alone at the top of Melco Entertainment and at the confluence of several key currents in Asian gaming. The spotlight burns even brighter on the eldest living son of legendary casino kingpin Stanley Ho, brought into the gaming business from banking as his father sensed liberalization of the casino market might demand fresh ideas. The son displays his father’s diplomatic and political skills, but times may demand more of Stanley Ho’s business instincts and the iron fist inside that velvet glove. Crown Resorts’ sell-down of its stake in the NASDAQ listed joint venture has made Mr Ho Melco Crown’s sole Chairman. But he was already the CEO and former co-Chairman James Packer has always explicitly asserted his cohort’s primacy in the company. Under Mr Ho’s leadership, Melco Crown has developed a clear style for its resorts. City of Dreams in Macau and Manila plus the 60% owned Studio City, opened at the south end of Cotai last October, all have strong entertainment components. CoD Macau has the US$250 million House of Dancing Water spectacle and Club Cubic, a big name locally. CoD Manila has international clubs Pangea and Chaos plus the world’s first DreamPlay indoor adventure park based on DreamWorks characters. Studio City has a Batman ride, Warner Bros Fun Park and famed Ibiza nightspot Pacha. Melco Crown’s inclinations fit Macau and Beijing government prescriptions for diversification beyond gaming, as well as the company’s penchant for experimentation. CoD Macau is adding Cotai’s first street front retail, plus a dramatic new hotel tower with nearly 800 rooms designed by the late Zaha Hadid. Studio City’s shock decision to open with no VIP tables seemed like another bold experiment, keeping with CoD’s pioneering focus on premium mass play. But the plan to upgrade some of those tables to VIP to enable smoking was quickly scuppered when regulators revealed their table grant was for mass market only. Entertainment and non-gaming haven’t necessarily been immediate money spinners but they do create an identity and loyalty. Melco Crown’s Macau properties, including Altira and Mocha Slot Clubs, improved EBITDA by 8% in the second quarter to US$209 million while CoD Manila nearly tripled to US$36.5 million. That’s all good. However, Sanford Bernstein points out that Studio City faces a potential breach of bond covenants without a substantial uplift in business – bond prices for the property’s 40% partner New Cotai fell to alarming levels in August. In response, Studio City is now planning to add VIP tables while the opening of next door neighbor the Parisian this month will help get traffic moving in its direction. Analysts say the simplest fix for Melco Crown would be to buy out its partner and get the full benefit of the property. New Cotai, albeit with different leadership, held up development of Studio City for the better part of a decade by insisting on getting its price for its asset. Through Melco International, his Hong Kong listed side of Melco Crown, and other entities, Mr Ho has a casino in Vladivostok’s Primorsky Integrated Entertainment Zone and ambitions to operate in Cyprus and Spain. By different measures, each is a far tougher market than Macau. No doubt Mr Ho has the pedigree for grit and strength. The time to show them is now. Lawrence Ho CHAIRMAN AND CEO Melco Crown Entertainment CHAIRMAN AND CEO Melco International Power 3,353 Last 4 Score year Claims to fame Greater control of Melco Crown with James Packer’s sell-down The oldest surviving son of Stanley Ho Active in Macau, the Philippines and Russia and is eyeing Europe 4