Macau Casino Empire
A customer plays on a gambling machine inside a casino, operated by Novomatic AG, in Wiener Neudorf, Austria
HONG KONG (AP) — Casino tycoon Stanley Ho, whose business empire dominated the Portuguese gambling enclave of Macao for decades, died Tuesday in Hong Kong at age 98. Considered the father of modern.
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- May 26, 2020 Ho’s empire still prospers, accounting for about half of the more than 40 casinos in Macau, as well as major gaming complexes in Portugal.
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- Macau is the only place in China where casinos are allowed. Born into a family that developed a flourishing gambling culture in the southern Chinese territory more than 50 years ago, Ms Ho is.
Billionaire Johann Graf has never had to fight on so many fronts at the same time.
The ordinary-man’s gambling company, Novomatic, the 73-year-old Austrian butcher-turned-tycoon created four decades ago, is raking in smaller profits as the pandemic drives people away from slot machines in casinos from Las Vegas to Macau. His company is also battling allegations of corruption, its chief executive has left and it needs to refinance about 1 billion euros (9.4 billion patacas) in debt.
“Not only is it in a delicate sector, but it’s also facing several challenges at once,” said Alois Woegerbauer, the head of 3 Banken-Generali Investment, a Linz, Austria-based firm managing 10 billion euros in holdings, including Novomatic bonds. “Given the weaker sales outlook and the legal issues, the coming months will be decisive to see which direction Johann Graf and the company take.”
This article is based on court documents and interviews with more than 25 business partners, bond investors, lawyers, bankers and former employees who asked not to be identified discussing their relationship with Graf and the company. It seeks to capture the secretive billionaire’s rise and the challenges he now faces.
Graf, whose ascent is the stuff of Austrian folklore, started out as a butcher in post-World War II Vienna, living with his parents in a small apartment with a communal toilet down the hallway. Fifty years on, bankers working on a stock-market listing of Novomatic told Graf his net worth was close to 5 billion euros. The incredulous entrepreneur, polishing off a Viennese Schnitzel at his art-deco city-center guest house, jotted the number down on a napkin and put in his jacket pocket, according to an adviser who was present.
While the listing never happened, the cigar-smoking mogul’s fortune has expanded. It is estimated by the Bloomberg Billionaires Index at $6.6 billion – after a $260 million drop this year – making him the second-richest man in Austria behind Dietrich Mateschitz, the co-founder of energy drink Red Bull.
Graf’s wealth stems mostly from his full ownership of Novomatic, which runs gambling bars, counts Book of Ra, American Poker II and Sizzling Hot among its best-selling games and whose slot machines are installed in the world’s biggest casinos. The company has more than 2,000 gaming facilities across 50 countries.
Business has been hit hard as disposable incomes have shrunk. On a recent afternoon, staff outnumbered clients at the company’s flagship outlet in Vienna’s Prater amusement park. In a hall decorated with gold-colored Egyptian goddesses and mystic signs, four customers sat before screens watching horse races from Paris – a far cry from its heyday when hundreds thronged to Europe’s biggest sports-betting and gambling bar each day.
Even before the pandemic roiled business, Novomatic had been caught up in a political scandal that rocked Austria last year. Then-Vice-Chancellor Heinz-Christian Strache was covertly filmed on the Spanish island of Ibiza saying “Novomatic pays them all,” as he spoke of political funding to a woman posing as a Russian donor.
The wide-ranging video that brought down the Austrian government also prompted police searches at the homes of Graf, other Novomatic executives and government officials – including Former Finance Minister Hartwig Loeger – allegedly touched by the scandal.
Prosecutors paint a picture of influence peddling on a large scale, alleging that the company promised politicians up to 500,000 euros for favorable legislation and “to help Novomatic gain a casino license in Vienna and a nationwide online license.” Monthly fees were part of a sham consulting contract, they claimed in documents seen by Bloomberg News.
Novomatic denies the allegations, saying the company, its executives and Graf haven’t been involved in any bribery attempts and that the case will be dropped once the facts are established. Heinz-Christian Strache has since retracted his Ibiza comments about the company.
Still, the case marks a turning point for Graf and the gambling empire he built. If charges are brought, banks and customers may reduce or cut ties with the company. S&P says its negative outlook on the company reflects the risk of prosecution, other legal action or “findings of unethical behavior.” Even if no charges are brought, the company may be forced to significantly cut back its Austrian presence.
In either case, it may mean a sea change for Novomatic and its founder, diminishing the role of the country where the enterprise started.
Graf, an avid vintage-car collector, has made sure Novomatic is among Austria’s most sought-after employers with higher-than-average salaries, food courts, private pension contributions and company cars. Local politicians were keen to support Novomatic after the company’s global expansion led to the creation of 3,000 well-paid jobs in the region.
While other company founders in their 70s step back, Graf – only one of whose three sons is active in the business – is still very hands on, people who have worked with him say. Christopher Schrank, a lawyer for Graf, said the entrepreneur isn’t involved in day-to-day decisions at the company.
For now, though, as the cloud of bribery allegations hangs over the company, luring top business talent, renewing licenses, getting bank loans and drawing investors remains a major challenge. Novomatic may have to retreat from some markets or cut staff to boost profits. Selling its iconic building in Vienna is an option it is considering.
Novomatic executives have said they may shrink the Austrian business to take some heat off, noting that it’s no longer a “core” market. MDT/Bloomberg
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Stanley Ho Hung-sun, the patriarch of Asia’s largest casino empire for half a century and a man whose very name is synonymous with Macau’s rise to overtake Las Vegas as the world’s gambling capital, has died, according to his family. He was 98.
He is survived by 14 of the 16 children he had with four women. Ho referred to the mothers of his children as his wives, three of whom also survive him.
“Although we know the day will come, it does not ease our sorrow,” said Pansy Ho Chiu-king, the eldest child from Ho’s second marriage, adding that the tycoon passed away at 1pm at the Hong Kong Sanatorium & Hospital. “Dad will stay in people’s hearts forever and our family will continue to [contribute] to society.”
Ho leaves behind a gambling empire that contributed to as much as half of the tax receipts earned by the Macau government, a heft that made him the first living resident of the gaming hub to have an avenue in the territory named after him. One of Asia’s richest men for decades, Ho’s personal fortune was estimated at HK$50 billion (US$6.4 billion) when he retired in 2018 just months before his 97th birthday.
“It is a great loss for Hong Kong,” said Stewart Leung Chi-kin, chairman of the Real Estate Developers Association (Reda), the guild of Hong Kong’s powerful property industry, of which Ho served as chairman for 20 years until 2011. “Ho has contributed a lot to the real estate industry during his tenure at Reda. He never retreated even when he faced pressure from the government. He put Hong Kong’s interest as his top priority.”
Besides his business exploits and his lifestyle – the fodder for Hong Kong’s society pages – Ho is also known for the billions of dollars he gave away in philanthropy. His name appears on 12 museums, hospitals and sports centres in Hong Kong and Macau. He is equally known for paying HK$2.57 million the largest white truffle at a charity auction, as returning two bronze animal heads – looted by invading forces from the Summer Palace in Beijing – to mainland China.
Ho was a member of the Chinese People’s Political Consultative Conference (CPPCC), the advisory body to the legislature. In announcing his death during the ongoing CPPCC meetings in Beijing, the Chinese state broadcaster described the casino magnate as a “patriotic entrepreneur.”
“It’s the end of an era,” said Allan Zeman, the non-executive chairman of Wynn Macau, one of the territory’s six gambling concessionaires, and a competitor to Ho’s family fortunes. Ho was “a very important part of Hong Kong” and influenced Macau’s gaming industry for decades, he added.
Zeman, who is also the chairman of Lan Kwai Fong Group, described Ho as “a very kind and passionate person” with a charming personality. “One thing I still remember is that he loved to dance. At many balls, he and his wife were always out there on the dance floor.”
Born to riches in Hong Kong on November 25, 1921, Ho was an heir of one the four families that controlled much of old Hong Kong’s wealth and colonial-era business. One of 13 siblings, Ho was the son of businessman Ho Sai Kwong, chairman of the Tung Wah Group of Hospitals. His grandfather Ho Fook was a member of the Legislative Council in 1917, while his grand uncle Sir Robert Hotung was the Head Comprador of Hong Kong in the former British colony.
The Ho family were Eurasians and initially made their wealth as compradores for Jardine Matheson, the British trading house. Ho was Chinese in the eyes of foreigners, and a “gweilo” in Chinese society, he said in a 1972 interview with The Star, a now-defunct Hong Kong newspaper, using the Cantonese colloquialism for foreigners.
The young Ho, who got his name from the family’s summer home in Stanley, grew up in a two-house residence on MacDonnell Road, with two gardens that ran for half a mile, he said in 1972. After Ho Fook’s death in 1926, Ho Sai Kwong’s business collapsed, and the family fell into poverty.
The young Ho was so destitute that he was stricken by beriberi as a teenager because of malnutrition, and could not afford to pay a dentist to remove an aching tooth. He would run away when girls, attracted by his Eurasian looks, asked him to buy them coffee, because he was so poor, he said.
Ho’s career and fortunes would forever be tied to Macau, where he fled during the Second World War with only HK$10 in his pocket. Then a Portuguese territory, Macau was neutral in the Pacific War in keeping with Portugal’s neutrality throughout the world war. The tiny colony became a haven for European and Chinese spies, businessmen and refugees.
Ho got his start in business at the Macau Cooperative Company, then the largest firm in the territory. The company smuggled luxury goods, machinery, rice and other essential items into wartime Macau. Ho made his first million by the time he was 24, he said.
Ho married his first wife, Clementina Angela Leitao, in 1942 in Macau. Also known as Tininha, Leitao came from a wealthy Portuguese business family, a lineage that gave Ho his entry into the upper echelons of Macau’s society.
Ho had business interests and property holdings that stretched from Portugal to Vancouver from his Macau base. Over the years, he tried to expand his casino empire in North America and Australia, but was always dogged by his alleged ties to triads, something he always denied.
Those connections Ho built in Macau continued to serve him long after the war ended. In 1961, with the financial backing of Henry Fok Ying-tung, Ho won the sole concession for gambling in Macau – an enormously lucrative financial prize – with his company, Sociedade de Turismo e Diversoes de Macau (STDM).
By the early 1990s, the tax returns from Ho’s gaming operations, centred around the casinos of the Hotel Lisboa and the Grand Lisboa, accounted for half of the Macau government’s total revenue. His business prospered even after Macau returned to Chinese rule in 1999, when the city became the sole location on Chinese soil to operate legal casinos.
The inflow of Chinese high rollers, retail gamblers and tourists fuelled the growth of Macau, helping the territory to surpass Las Vegas as the world’s gambling hub. Ho’s empire still prospers, accounting for about half of the more than 40 casinos in Macau, as well as major gaming complexes in Portugal.
“He selflessly shared the secrets of his success when Macau opened up gambling to competition, and supported the government’s push to modernise the management of gaming,” said Lui Che-woo, chairman of Galaxy Entertainment Group, one of the rival casino concessionaires in the gambling hub. “Macau has surpassed Las Vegas today, due in no small part to Ho’s contributions.”
The Ho and the Fok families remain intertwined. The Henry Fok Foundation reached a pact in January 2019 to keep the children of Ho’s second wife Lucina Laam King-ying as the majority shareholders of Hong Kong-listed SJM Holdings, one of the six casino license holders in Macau.
Laam’s second daughter Daisy is chairman of the company, while Ho’s fourth wife Angela Leong is co-chairman with a Fok family’s scion Timothy Fok Tsun-ting. SJM operates 20 casinos in Macau, with 1,700 gambling tables and 2,400 slot machines between them.
The sprawling Ho clan, which includes kung fu superstar Bruce Lee as Ho’s second cousin, practised polygamy and had a vast network that stretched throughout Hong Kong’s business and socialite circles.
Ho married his first and second wives before Hong Kong outlawed concubinage in 1971. Still, Ho went on to sire 17 children with four wives. Every one of Ho’s three living wives (his first wife Clementina died in 2004) own majestic homes in Hong Kong and have become business owners in their own right.
His fourth wife, Angela Leong On-kei, has an estimated net worth of US$3.7 billion, and owns a string of high-end commercial and retail real estate in Hong Kong, Macau and mainland China.
Ho’s third wife Ina Chan had an estimated fortune of US$1 billion in 2014. Lucina Laam, Ho’s second wife, is the mother of three billionaires – daughters Pansy Ho and Daisy Ho Chiu-fung, and son Lawrence Ho Yau-lung. Pansy Ho, whose 2018 fortune was estimated at US$5.5 billion by Forbes, is one of Hong Kong's richest women.
In 2011, his second and third wives, plus the children of his second wife, were alleged to have tried to illegally take over his casino holdings. The affair ended in an amiable settlement, but only after a public fight that exposed the fractures in the extended family.
It wasn’t the only time that the Ho family squabbles erupted into public view. In 2005, in the middle of an acrimonious fight with his sister, Winnie, over dividends and payouts from investments, Ho said: “I no longer regard her as a sister.”
Winnie had once been the lover of Eric Hotung, grandson of Robert Hotung – they were caught up in their own fractious lawsuit in the 2010s, soon before Winnie died. During the war, Winnie and some of her family had fled to Vietnam, which was a major source of the rice that was imported to wartime Macau.
Like many casino bosses, Ho himself didn’t indulge much in gambling. But unlike many of his peers, he loved ballroom dancing.
Ho seemingly enjoyed the intrigue and idiosyncratic nature of his life. In later life, he partnered with Albert Yeung Shau Shing of Emperor Group on a business in North Korea. During the 2003 US invasion of Iraq, North Korea’s government offered asylum to Saddam Hussein, extending the overture from Ho’s Macau office.
Of Ho’s 17 children, only three – Pansy, Daisy and Lawrence – have managed to become business leaders in their own right. Daisy, the second daughter of Ho’s second wife, is active in politics, having been appointed to the Chinese People’s Political Consultative Conference (CPPCC) representing Tianjin since 2008. Youngest daughter Josie Ho from the second family is a Hong Kong actress and singer.
Stanley Ho was no stranger to tragedy either. His eldest son, Robert, died in a car crash in 1981 along with wife Suki Potier, a well known British model, leaving behind two young children. Robert’s death was said to be devastating to Stanley and Clementina.
Ho had reportedly been grooming Robert as heir apparent. A palatial garden home on Shek O Headland Road, bought by Stanley and later occupied by Robert, was left to decay and fall into ruin.
It was later bought by Ho’s third wife, Ina, who redeveloped the site into luxury town houses.
The leaders of both Hong Kong and Macau expressed their condolences to Ho’s widows and children. Due to the outsize role of his casino business to Macau’s economy, job creation and social stability, Ho was instrumental in the territory’s peaceful return from Portuguese rule to Chinese sovereignty, serving as deputy chairman on the preparatory committee for the 1999 handover.
Though weary at first of being addressed as a “comrade” by Communist Party cadres - he was concerned that his fortunes would be nationalised - he later found comfort in being addressed as a “councillor.” He preferred to be known as a “patriotic capitalist,” Ho said in an interview with Guangzhou Daily.
“Ho was a larger-than-life figure whose unparalleled vision, entrepreneurial spirit, resourcefulness and fearlessness were widely-recognized and well-respected,” according to a statement issued by Shun Tak group on behalf of the family. “To us, he was and forever will be our inspirational role model.”