Pansy Ho still has a hand to play while leading two casino empires
Pansy Catilina Ho Chiu-king is a woman in the middle of two competing casino empires, a US regulatory investigation, and a handful of billion-dollar investment decisions waiting to be made.
She finds herself at this point after spending the past 13 years serving her father - Macau gaming magnate Stanley Ho Hung-sun - faithfully enough to take over the reins of his listed flagship and win a seat on the board of his ultimate holding company, Sociedade de Turismo e Diversoes de Macau.
But en route she created enough distance between herself and the 86-year-old billionaire to convince gaming regulators in the state of Nevada that she is an independent businesswoman.
The move resulted in winning penultimate US approval for her four-year-old Macau casino partnership with MGM Mirage, the world's second-largest gaming company by market value and the biggest landlord on the Las Vegas Strip.
'I really do not see a direct conflict,' Ms Ho said during a rare interview last month. 'I always keep a clear distinction as to what my roles are and where my responsibilities are.'
Seldom have two competing business groups relied so much on the same person, in the same place, at the same time. But for Ms Ho, 45, dividing her time and loyalties between her father's investments - which range from casinos to shipping, property, airlines and hotels; and her own joint venture with MGM (which last month opened the US$1.25 billion MGM Grand Macau casino hotel) - promises to prove an extremely profitable gambit.
Still, there is one more hand left to play out before she can count her chips.
While Nevada has given the MGM partnership the green light, officials in the state of New Jersey continue a three-year investigation into the 'suitability' of the venture. The probe has been complicated by a series of top-level personnel shifts within the gaming regulatory agency, and the leaking on the internet of a 300-page background report that the New Jersey Star Ledger said was commissioned by rival operator Las Vegas Sands Corp regarding Ms Ho, her father and his alleged links to organised crime.
'Stanley Ho is a wealthy Chinese businessman who has been the subject of numerous public allegations suggesting that he has ties to Asian organised crime,' the New Jersey state attorney-general's office said in its 2005 annual report. 'The investigation focuses on the relationship of Pansy Ho and her father,' the report said.
Mr Ho has previously issued repeated denials of links to organised crime.
'We are not here to say that the regulatory bodies in the United States would be pleased with us doing business with Stanley Ho; they wouldn't,' MGM Mirage chairman and chief executive J. Terrence Lanni said last month in an interview.
'Does he love her? Does she love him? I'm sure that there is love both ways there ... but the issue is: is she influenced?'
If regulatory officials answer yes to that question, MGM could be forced to back out of the Macau partnership or alternatively to divest its holdings in New Jersey, which include a 50 per cent stake in the US$1.1 billion Borgata resort in Atlantic City and an adjacent 29 hectares.
In October, MGM announced plans to develop the site into New Jersey's most expensive resort to date, a US$5 billion casino complex featuring hotel towers, a retail arcade and convention centre. Some analysts said the move was targeted to give incentive to state regulators to approve the company's Macau partnership.
MGM executives have said it was unrelated.
'New Jersey is the last jurisdiction that is looking at this,' Mr Lanni said, citing favourable conclusions to earlier investigations by Nevada and Mississippi. 'If they look at everything these other jurisdictions did - see what we have seen - they will recognise that she is independent and separate from her father.'
When Pansy Ho returned to Hong Kong in the 1980s after spending her high school and university years in California, she made a conscious choice not to follow other siblings into the family business. Instead, she and a few friends set up their own events planning and public relations company, Occasions.
'It is true if it weren't for who I am, Dr Ho's daughter, it probably would not have been easy for me to get some references and referrals,' Ms Ho said. 'However, it is not true that just because people needed to give face to Dr Ho I would automatically gain contracts; quite the contrary.
'You get introduced,' she said, but some potential clients thought 'that I was doing it for fun or just as a hobby, and they tended to not trust that I would be able to deliver ... so it would take that much more effort from my company's part to show our sincerity and ability.'
Occasions did well and leveraged on Ms Ho's large social network in Hong Kong, but she eventually left it in the hands of her partners and in 1995 returned to the family fold as an executive director of Shun Tak Holdings, the ferry operator and property developer founded by Mr Ho in 1972.
Proving herself to her father was another challenge.
'In a way he never really gives you any tips or teaches you any lessons in business or even in life. I mean, he is himself bigger than life,' Ms Ho said.
'He is very impatient and a very fast learner so you've got to be really prepared ... how you deal with a person like that and interact with him through business ventures and so on is the greatest lesson. Because if you can satisfy [him] or at least gain his trust that is already a very big feat.'
Ms Ho earned her stripes at Shun Tak by brokering the June 1999 merger of the firm's shipping operations with China Travel Shipping, creating a near-monopoly on one of the world's most profitable passenger ferry routes. She was promoted to managing director of the company that same month.
Since that deal, which left Shun Tak a controlling 71 per cent stake in the ferry operations, annual passenger traffic on the Hong Kong-Macau route has almost tripled.
Her father remains chairman of the company and its biggest individual shareholder, but Ms Ho is by all accounts in charge of daily operations at Shun Tak. She has been the driving force behind the firm's highly successful joint venture property developments in Macau: Nova City (with Hopewell Holdings) and the under-construction luxury residential complex One Central (with Hong Kong Land).
Her track record in business is solid and by now well established, but Ms Ho's management style is not without its detractors.
'Shun Tak isn't managed like a western enterprise, but more like a Chinese state-owned company. It's run by the people on top and the orders are sent down for everybody else to follow,' said one source familiar with the corporate culture at Shun Tak.
A former employee describes Ms Ho as demonstrating a short fuse: 'Pansy loses her temper quite quickly and can be very hard to get along with at times.'
Ms Ho says her job is to focus on the bigger picture: 'As the managing director of a company you are not just supervising operations. You are the strategic planner, you are the vision setter and you are the one who is always trying to build your network,' she says.
Of course, Ms Ho is also the managing director of another sizeable company: MGM Grand Paradise, her 50-50 joint venture with the US gaming giant.
'Some investors don't like the fact that Pansy has a side business with MGM,' said one analyst. 'They think there is some conflict of interest there.'
The MGM venture has opened one resort and is in the planning stages for a second, larger property on the Cotai Strip. At the same time, Shun Tak is planning to include a casino in its Harbour Mile project, a proposed 3.8-million-square-foot residential, office, hotel and retail complex stretching most of the distance from the Macau Tower to the MGM Grand's doorstep.
The catch? Shun Tak plans for Mr Ho's Sociedade de Jogos de Macau, holding company STDM's licensed gaming unit, to operate the casino at Harbour Mile -apparently in direct competition with Ms Ho's MGM venture. She says the door is not necessarily closed for her MGM partnership to operate the Harbour Mile casino.
'In any commercial dealing it is always a matter of the right price, the right consideration,' she said. 'At the end of the day it will still also be up to MGM as a [gaming] concessionaire whether they will select Shun Tak as a potential partner.'
However, Mr Lanni rules out taking part in a casino at Harbour Mile: 'If Shun Tak wants to do that they can do that on their own. Maybe I didn't make it as clear as I should have - our regulators were not happy with us because our original discussions were to have a joint venture with Shun Tak.
'And because of the ownership of Shun Tak they didn't think that would be appropriate, the Nevada regulators, and thus we crafted the arrangement with [Pansy Ho] as an individual.'
Nevada regulators 'would certainly frown on us now if we were to talk about a joint venture with Shun Tak there [at Harbour Mile] or anywhere else with a casino operation', Mr Lanni said. 'So that's just not going to happen.'
The continuing three-year investigation is being conducted by the state's Division of Gaming Enforcement, which is on its third chief in less than a year.
Complicating matters, the Star Ledger reported last month that DGE investigators had been doing freelance work for Spectrum Gaming Group, a New Jersey consultancy commissioned by Las Vegas Sands to produce the report on the Ho family that was posted online by an anti-gambling group in New York state called the Family Focus Coalition.
The DGE investigators had written for permission from their supervisors for the freelance assignments and none of their work for Spectrum overlapped with their official duties, including the continuing DGE investigation in Macau, according to the press report.
However, the issue adds more uncertainty as to when New Jersey officials might schedule a public hearing on MGM's Macau partnership with Ms Ho. A spokesperson for the state's Casino Control Commission said last week: 'The DGE has not yet filed a report so we can't schedule any kind of hearing. As for when they might file, that's up to them.'
Ms Ho's brother Lawrence Ho Yau-lung went through a similar 'suitability' probe in Australia, and their father resigned as chairman of Melco International Development before gaming regulators in the state of Victoria signed off on Lawrence Ho's joint-venture with Publishing and Broadcasting Limited.
Asked if the multiple, drawn-out investigations past and current are a source of frustration or embarrassment to her father, Ms Ho sounds a note of exasperation: 'I couldn't answer on behalf of him but I would suspect yes,' she said.
'He had never meant to take any direct participation in anything that respectively my brother and myself are doing now vis-a-vis our gaming ventures. So it is actually in a way unfair that he has to be brought into the picture in all of this.'
Additional reporting by Sandy Li
Pansy Ho's business dealings leading to the opening of the MGM Grand Macau
Takes first role in father's business empire as director of Shun Tak Holdings
Brokers merger of ferry operations, becomes managing director of Shun Tak
Appointed a director of STDM, her father's ultimate holding company
STDM's 40-year casino monopoly in Macau ends with the issuance of three other gaming licences; MGM's bid fails
MGM announces 50-50 Macau casino partnership with Pansy Ho
Gaming regulators in Nevada and New Jersey launch separate investigations into 'suitability' of the MGM-Pansy Ho venture
MGM contributes US$180 million to Macau venture, Pansy Ho contributes US$80 million. The joint venture buys a 'subconcession' or gaming licence from Mr Ho's Sociedade de Jogos de Macau for US$200 million
MGM and Ms Ho break ground on debut property, the US$1.25 billion MGM
Nevada Gaming Commission unanimously approves MGM venture with Pansy Ho
MGM announces plans for US$5 billion casino resort and convention centre in Atlantic City, New Jersey
December 18, 2007
MGM Grand Macau opens, featuring 600 rooms in 35 storeys