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The Man Who Controlled Macau's Economy š°
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Finlay Williams
October 17, 2024
2 minute wacky businesses, you can tell your buddies about š§
Stanley Ho wasnāt just any businessman, he was known as the Godfather and the King of Gambling, titles reflecting the 40-year monopoly he held over Macauās gambling industry. For four decades, Ho had total control, turning Macau into the gambling capital of the world. The monopoly was no stroke of luck though, In 1961 China listed the rights to the monopoly, and Ho bid high. He crushed the competition (by a margin of just HK$17,000), and with that, Sociedade de Turismo e DiversƵes de Macau (STDM) was born.
Triad deals and government granted monopolies š§
In 1962, STDM became the sole legal operator of casinos in Macau, but Stanley Ho didnāt just stop at gambling. He controlled everything; casinos, hotels, ferry routes, and even high-speed jetfoils between Hong Kong and Macau through his company, Shun Tak Holdings. Itās like if Apple also owned the airports you flew through to buy their iPhones.
Hoās genius was vertical integration. He didnāt stop at getting people to play at his casinos. His grip on the tourist infrastructure made sure that every dollar spent in Macau passed through his empire, whether you were rolling dice or just eating a meal. And when his monopoly ended in 2002 Ho still came out on top. The trick wasnāt his casinos - it was a move involving the underworld.
What are the nuggets? š
š° Origin: Hoās journey to dominance started from āhumbleā beginnings. During WWII, he made his first fortune smuggling luxury goods across borders into China. In 1961, he, along with business partners, bid for Macauās gaming monopoly and won. Despite not having the highest bid, Ho promised to develop Macauās infrastructure, pushing tourism to new heights.
š° Inflection moment: The big turning point came in the ā80s when Ho pioneered something that would change the casino industry forever: junket rooms. Instead of letting organised crime scalp ferry tickets, he cut them a deal. They could set up private gambling rooms in his casinos in exchange for a commission. This move kept the triads happy while boosting casino profits, and it became the blueprint for how VIP gambling works today.
š° Funding: Ho didnāt really rely on outside investors. Most of his empire was self-funded, thanks to insane cash flow from his monopoly. But he knew how to play the game when he needed to. Like when he launched Shun Tak Holdings on the Hong Kong Stock Exchange in 1970.
š° Big moves: By the 1990s, Stanley Ho was spreading his influence globally. He opened casinos in North Korea and expanded his shipping, real estate, and tourism businesses across Asia and Africa. To me one of his most interesting plays was owning the Macau Jockey Club. You wouldnāt think horse racing would be a core part of a gambling empire, but Ho used it to funnel even more tourists into Macau.
š° Triad Ties: Ho wasnāt just dealing with high-rollers, he had alleged ties to organised crime. In the 1990s, his name popped up in reports linking him to the Kung Lok Triad, a notorious Chinese mafia group. Itās even been said that his connections with underground crime helped him keep control over Macauās gambling scene, especially in the early days.
š° Awesome play: When the government ended his monopoly in 2002, most businesses wouldāve crumbled. But Ho was prepared. He had built out the junket system, which kept high rollers coming back to his casinos. Naturally, triads arenāt the easiest bunch to negotiate with, so his competitors had little to no chance at competing.
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