Macau Magnates Lawrence Ho & Francis Lui Open Up About … – Forbes
A funny thing happened on the way to Japan Gaming Congress in Tokyo last month. When I got to my hotel room and checked my email, hoping to confirm an interview with one of the top executives attending the conference, I found a note from the investor relations consultant for Melco Resorts and Entertainment. The email said Melco Chairman and CEO Lawrence Ho wanted to speak with me, and “was I available today?” I figured it was a mistake but replied anyway. It turned out that Lawrence Ho really did want to talk, and, keynoting last month’s Global Gaming Expo Asia in Macau, so did Galaxy Entertainment Deputy Chairman Francis Lui. Macau’s top gaming industry leaders in Cotai not named Adelson or Wynn are increasingly expressing their views.
In the interview, published in Inside Asian Gaming, Ho gives a very frank assessment of Melco and his commanding role in it. We talked just after James Packer’s Crown arranged to sell its final shares in what Ho calls history’s most successful gaming business. He concedes that for both parties, the arrest of Crown employees in China last year on charges of illegally promoting gambling factored into the decision to complete the split. He added that going solo may help Melco do “whatever it takes” to get a casino license in Japan.
Ho threw cold water the investment community’s wish for a fast end to Melco’s 60-40% partnership with US investor group New Cotai at Studio City. “They’re distressed debt guys, and so there’s never going to be a scenario where we can take advantage and try to take them out at below market value,” Ho explained, adding the two sides can’t even agree what Studio City is worth.
My observation that Melco properties add up to less than the sum of their frequently outstanding parts has become a boardroom mantra, according to Ho. We’ll see if Macau and Beijing were listening to what Francis Lui had to say in his speech opening G2E Asia, the region’s biggest gaming conference and trade show.
While the eldest son of Galaxy patriarch Lui Che Woo acknowledged that Macau needs the “total support of the central government” in Beijing, he called out authorities where he feels policy and imagination have failed. He proposed a number of measures he felt would help keep Macau competitive as its principal customers, mainland China travelers, become more adventurous and more Asia-Pacific destinations offer the same first class gaming experiences as Macau.
Lui cited Melbourne as a destination where gaming and events have revived tourism and urged the Macau Government Tourism Office to attract work harder on bring international scale events to Macau. He also suggested adding sports betting to the casino gaming offering and investigating eSports, competitive computer gaming that’s popular as a spectator and betting pastime across Asia.
On the first anniversary of Macau’s ban on proxy betting, Lui suggested allowing phone betting and online betting for players while they are in Macau. Asked about reports that the proxy betting ban has been less than airtight, Lui shrugged, “Rome isn’t built in a day.” (And, yes, Lui took questions from the audience following his speech.)
Lui also called for borderless entry between Macau and Hengqin, the mainland island without casinos where massive theme park and hospitality development is underway, including a Galaxy resort. “This would make Macau a more compelling family market,” Lui said. “It would be like having Las Vegas and Orlando next to each other.”
None of the things Lui mentioned are shocking or new. We’ve heard them before but not so many at one time from anyone as high up in the Macau casino business. These public pronouncements from Ho and Lui are a far cry from what used to be the standard fare from concessionaires – except the Americans, especially Las Vegas Sands’ Sheldon Adelson and Wynn Resorts’ Steve Wynn – avoiding even a hint of disagreement with the authorities.
After a two year slump in revenue and share prices driven by public policy and amid tightening regulation of Macau’s gaming industry, in line with global trends, casino licensees may realize that they need to be more visible and vocal. As concession expirations loom, speaking out can also enhance their leadership of Macau’s gaming industry and Macau’s gaming leadership in the region, boosting their value as operators. Ho and Lui may see their best defense as a good offense, and perhaps it’s no coincidence that Melco and Galaxy are both in the midst of significant property expansions. In essence, the two are putting their mouths where their money is.