Ho wins extension of sports bets monopoly
Stanley Ho Hung-sun's Macau sports betting monopoly has won another one-year extension, just in time for the lucrative World Cup soccer tournament, which kicks off next month.
Despite calls to liberalise the sector, Macau chief executive Fernando Chui Sai-on approved the extension for Ho's Macau Slot, which has monopolised internet, telephone and over-the-counter betting on both soccer and basketball for a decade.
The monopoly was extended until June 5 next year, according to a statement yesterday in the government gazette. Macau Slot is 48 per cent owned by Ho's private Sociedade de Turismo e Diversoes de Macau (STDM) and 4 per cent by Louis Ng Chi-sing, according to SJM Holdings' listing prospectus. Ng is managing director of Macau Slot and a director of SJM, which is majority owned by STDM.
The Fifa World Cup, which is held every four years, kicks off on June 11 and typically means booming business for bookmakers around the world - from London-based multinational firms such as Ladbrokes and William Hill to Philippines-based internet operators. The Hong Kong Jockey Club saw a 17 per cent annual increase in soccer betting volumes in 2006, the last time the tournament was held.
For Macau Slot, extra business from the World Cup could help soften a slide in revenue. The monopoly began selling instant lottery tickets aboard Hong Kong-Macau ferries in 1989, added soccer betting just before the 1998 World Cup and launched basketball betting in 2002.
For a while, the monopoly appeared to extend beyond Macau - there was no legal soccer betting in Hong Kong until 2004. According to a statement on Macau Slot's website, the firm had 100,000 registered users and 30,000 active betting members as of December 2003, 85 per cent of whom were from Hong Kong.
The Jockey Club's launch of legal soccer betting in July 2004 had an immediate impact. Macau Slot's soccer wagers fell 13 per cent that year to 8.85 billion patacas and have been on a dramatic decline since. Soccer betting volume last year fell 14.3 per cent from 2008 to 3.83 billion patacas.
Despite various calls from industry players, Macau has stopped short of moving to liberalise sports betting, as it did in 2001 with casino gaming.
Rival casino operators in Macau have expressed interest in launching and managing sports betting operations but have been unable to do so given Macau Slot's monopoly status and its connection to SJM. At the same time, several leading foreign sports-betting firms have shown interest in entering the market.
Despite Macau Slot's falling revenues, profits appear to have remained steady and the company cash-rich. Macau Slot reported a profit of 53.61 million patacas in 2007, down 2.8 per cent from 55.2 million patacas in 2006, the most recent earnings data available. At that time, cash and cash equivalents were 613.4 million patacas, nearly double the firm's liabilities.