Amid this week’s fanfare around the opening of Venetian Macau, the world’s biggest casino, and Macau’s evolution into a gambling centre to rival Las Vegas, Beijing is moving to tighten its grip on gambling revenues in the former Portugese colony.
That is the broad interpretation of Wednesday’s move by Industrial and Commercial Bank of China to seal its acquisition of a controlling interest in Seng Heng Bank, the Macao lender majority-owned by gaming tycoon Stanley Ho, Seng Heng’s chairman and managing director.
ICBC will pay HK$4.55bn for a 80 per cent stake in Seng Heng, including HK$3.98bn for the controlling stake owned by Sociedade de Tourismo e Diversões de Macao — Mr Ho’s flagship gaming, transport and infrastructure conglomerate.
That may well be the case, says Financeasia.com, “but it is equally true that for ICBC, which has 2.51m corporate banking customers and 180m personal banking customers, the acquisition gives it a strong foothold in a region which seems set to continue to grow and takes the bank nearer to its stated goal of being a “first-class international financial institution”.
Reuters notes that while the deal is small for ICBC, it gives the Beijing-controlled lender access to a market that has seen gaming revenue overtake that of the Las Vegas strip, with billions of dollars in investment planned by global casino and hotel operators.
Macau’s gaming revenues overtook those of the Vegas Strip last year, and if the Venetian succeeds, analysts say it will help double that annual income to $13.7bn by 2010, says Reuters in a separate report.
Construction delays, funding problems, infrastructure bottlenecks and the risk of an oversupply of both hotel rooms and baccarat tables could threaten such rosy forecasts for the only place in gambling-mad China where casinos are legal. But Sheldon Adelson, the chairman of Las Vegas Sands, which is behind the Venetian resort, told Reuters the $2.4bn spent on the Venetian would be recouped within three to five years.
As for Ho, who lost his near four-decades old monopoly on gambling in the territory in 2002, when Beijing opened up the market to competition, there have been various reports of potential deals including, most recently, tales of his meetings in Australia with politicians in New South Wales about a casino license there.
The Sydney Morning Herald reported on August 20 that Ho, whose son Lawrence is involved in casino interests in Macau with James Packer, one of Australia’s richest men, held private talks with Morris Iemma, the NSW premier, in which the subject of a possible second casino for NSW came up.
But Crikey.com points out that Ho – the subject of various allegations about links with Asian organised crime – has backed off from direct involvement in Australian JVs, leaving much of the wheeling and dealing over extending the Ho family’s Macau-based gambling empire to Lawrence and his daughter, Pansy.