By Ese Erheriene
HONG KONG--Gambling tycoon Stanley Ho, who transformed the southern Chinese territory of Macau into the world's biggest casino hub, is to retire from his flagship company after more than 50 years at the helm.
Mr. Ho, 96, will stand down as chairman and executive director of SJM Holdings Ltd., after its annual general meeting in June, according to a company filing with the Hong Kong exchange. Mr. Ho will officially hand over the reins to his daughter Daisy Ho. His fourth wife, Angela, and current board member Timothy Fok will be made co-chairmen and executive directors. Mr. Ho will stay on as chairman emeritus.
" There's no name more associated with the Macau gaming industry than Mr. Ho," said Grant Govertsen, an analyst at gambling-industry investment bank Union Gaming.
The departure of Mr. Ho will have little impact, given he stepped back from the day-to-day running of his casino empire due to ill health several years ago. During that time, SJM has lost ground to competitors including Wynn Macau Ltd. and Sheldon Adelson's Sands China Ltd. Its market share halved to 16% last year from 2010, a slump attributed by investors to a lack of strategic innovation. The firm has failed to develop a presence in the lucrative Cotai strip, with its properties mostly focused on the peninsula area.
SJM didn't immediately respond to requests for comment.
Investors reacted positively to the news. The company's shares jumped as much as 10% in early trading in Hong Kong. The stock closed up 3.7% on the Hang Seng Index.
A Portuguese and Cantonese speaker, Mr. Ho fled to Macau during World War II to escape a Japanese invasion of Hong Kong. He made his first fortune trading supplies for a company owned by the Japanese military, the Portuguese government and local Chinese merchants.
Dubbed by local media as the 'godfather of gambling,' Mr. Ho won a gambling monopoly in the semiautonomous enclave with a group of investors in 1962. Now a father of at least 17 children, he started Sociedade de Jogos de Macau (Macau Gaming Society) in the early 1960s with one casino. SJM currently operates 19 properties.
In 2002, Macau liberalized gambling, ending SJM's monopoly, and bringing in new players. It transformed the city into the world's most lucrative casino town, with gambling revenue five times that of Las Vegas in 2017.
All six operators in Macau were squeezed during the more than two-year downturn in gambling revenue that began in 2014, following a widespread antigraft campaign by Beijing. While the other operators largely began to recover in 2016, SJM's stock has continued to underperform.
Following its most recent earnings, Morgan Stanley predicted "further market share losses" into 2018, largely to do with delays with its Cotai project, Grand Lisboa Palace, and new capacity coming online.
"Everyone has kept waiting for SJM to come to life," said a Macau-based shareholder in the company.
Mr. Ho's retirement marks the second exit of a dominant casino personality this year, following Wynn Resorts chairman Steve Wynn's resignation after allegations of sexual misconduct. That could signal a shift in Macau toward a more corporate way of doing business.
"You could probably draw a parallel with what happened in Las Vegas in the 60s and 70s, when it was nothing but personalities, and how it became so much more corporatized over the ensuing decades," said Union Gaming's Mr. Govertsen. "In a way you're kind of seeing a similar pattern happen here in Macau."
Write to Ese Erheriene at [email protected]