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IN-DEPTH 29 March 2016
Stanley Ho: The King of Macau
Gareth Bracken profiles Stanley Ho, the billionaire trailblazer who laid the foundations for today’s world-leading Macau casino market
By Gareth Bracken

The King of Macau. The King of Gambling. Macau’s underground governor. In the unlikely event you don’t know of Stanley Ho, a glance at the 94-year-old casino mogul’s nicknames should offer a pretty succinct summary of what this grandfather of gaming is all about.

Stanley Ho’s story begins in 1920s Hong Kong, where he was born into the highly wealthy and powerful Ho Tung family. However, the Great Depression hit hard and his father and uncles went broke, with two of Ho’s older brothers reportedly committing suicide as a result of their struggles. Ho was transformed from a childhood of riches to his mother being unable to afford his teenage school fees.

There was at least one positive to be drawn from the experience however. The lack of financial resources forced Ho to transform himself from an average student into one who attained high marks and received scholarships.

In a CNN interview in 2004, Ho recalled his downturn in fortune and what the experience had taught him. “When I was eight, my father had a pleasure boat, we had a few motor cars on the road, we had a summer house in Stanley – where I got my name – and we were really enjoying so much, we were absolutely spoilt,” he said. “From that, imagine, to rags, when even my own family members – I meet them in the street – would turn away their faces.” He concluded: “You have to learn from humility.”

The family tragedy also served as a major motivator for young Stanley. “I saw my mother crying every day, going to a pawn shop every day to keep us going, and I promised her I will make good no matter what,” he said. “So I managed to bring her from Hong Kong to Macau during the war years, and she lived here happily thereafter.”

Ho worked as an air raid warden for 15 days but fled to the neutral region of Macau during World War II following the Japanese invasion of Hong Kong, becoming, in his own words, a refugee. The experience stayed with him and he has spoken of how well he was treated there, describing himself as “indebted” to his second home.

While the triads’ historic involvement in Macau’s casino sector is undeniable, Ho has described his supposed connections as a “misconception”
The Wall Street Journal describes Ho as becoming wealthy by “trading supplies for a company owned by the Japanese military, the Portuguese government and local Chinese merchants”. In his early years in Macau, a special administrative region of China, Ho worked from six in the morning until 10 at night with no time for any sort of social life. The hard graft paid off however: Stanley Ho arrived in Macau with 10 dollars in his pocket and within a year was a millionaire. According to Joe Studwell’s book Asian Godfathers, Ho was running luxury goods into China during the Second World War, with his varied business interests expanding into trading the likes of kerosene and aeroplanes. There was high drama too, with Studwell writing of Ho once having to fend off a pirate attack.

Fast forward to 1961 and the 119th Governor of Macau, Jaime Silvério Marques, has designated the area as a “permanent gaming region” offering low taxation. The existing monopoly concession of Tai Heng is set to expire at the end year and Macau is looking to liberalise gaming in the region. Tai Heng bids for the new concession alongside a new firm, co-founded by Stanley Ho, named Sociedade de Turismo e Diversões de Macau (STDM). STDM won the day and its first property, Casino Estoril, opened the following year, with the flagship Casino Lisboa launching in 1970.

Macau gaming underwent a transformation during STDM’s monopoly years, with an upgrade in transport from ferries to helicopters (via jetfoils) mirrored by an upgrade in the overall casino experience, with glitzier establishments and more luxurious accommodation superseding the much more old fashioned ‘gambling dens’ of the past.

Ho isn’t a gambler and doesn’t believe in luck, which he says constitutes only 5% of his success. One of the few instances where he does acknowledge his good fortune came around a decade after launching with STDM in Macau, when Hong Kong began to issue immigration permits allowing visitors to the region.

Ho has been accused over the years of having links to organised crime in Macau. While the triads’ historic involvement in the region’s casino sector is undeniable, Ho has described his supposed connections as a “misconception”.

In August 1992, US Senate Committee hearings stated that, although Ho was not known to be involved in organised crime, he was linked to former associates who were. This is believed to have been a reference to his former business partner Yip Hon, who created STDM with Ho and Henry Fok.

It has been claimed by a US anti-gambling coalition that around the turn of the millennium Ho refused to appear in front of a Fillipino committee and answer questions about alleged ties to triads and money laundering. “These reports only say that I know some triad members,” he told the South China Morning Post. “Well, maybe you have come across some. To be associated with or to know someone is completely different.”

By 2003, the final year of the STDM monopoly, Macau’s then 11 casinos employed 12,400 people – 6% of the region’s total workforce. The venues generated gaming revenue of 29.5bn patacas – about 60% of the Vegas market – and paid 10.57bn patacas in direct tax to the government. The following year foreign operators were allowed into the market and in 2006 Macau overtook Las Vegas gaming revenues.

The arrival of foreign firms such as Wynn and Las Vegas Sands placed STDM somewhat in the shade as an operator of what were now often considered the more ‘downmarket’ casinos, at least in terms of mass market gaming. At the time of writing, the former monopoly has only the third largest Macau market share at around 20%. It’s fightback includes the development of the Lisboa Palace resort, set to open in 2017.

Away from the tables, Ho has admitted his personal life is “complicated”. He married his second wife under a Qing dynasty code, since outlawed, that allowed men to take multiple wives, and has also fathered children with two other woman he considers himself married to. He has either 16 or 17 children, according to different reports. One of them, Pansy Ho, is co-chair of MGM China, the Macau-based subsidiary of MGM Resorts International, and Hong Kong’s richest woman with a current net worth of $3.7bn, according to Forbes.

In 2004, MGM Resorts formed a joint venture with Pansy, and the new alliance purchased a sub-concession from SJM Holdings, the gaming subsidiary of STDM, for $200m to build the MGM Macau. It has been reported that it was Pansy rather than Stanley who did the deal due to the Nevada regulator’s concerns regarding the latter’s alleged organised crime links. Indeed MGM Resorts was initially instructed by New Jersey regulators to sell its 50% stake in Atlantic City casino Borgata because of MGM’s connection to the Ho family, although MGM was later allowed back into the state. Another Ho sibling, Lawrence, is the billionaire CEO of casino operator Melco Crown Entertainment.

In 2011 Ho, who was then said to be worth $3.1bn, divided his $1.6bn controlling stake in STDM among his relatives, keeping a small fraction for himself, in an attempt to quell an ongoing family feud over inheritance which had even pitted him against some of his own children. The saga was characterised by claims, counter-claims and lawsuits, as well as the poor health of Ho, who underwent brain surgery in 2009.

SJM has a battle on its hands to regain market share from some notable overseas adversaries. Whichever operators come out on top, they will be building on a base put firmly in place over 50 years ago by The King of Macau himself.
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IN-DEPTH 18 October 2019
Automating acquisition

Alex Czajkowski discusses the automation of acquisition within online gaming.

It’s almost every operator’s perennially hot topic - acquisition. While acquisition strategies can vary market-by-market, there is a case in every market for automating more of the process to improve conversion rates or significantly reduce acquisition costs. In any market, you can segment your prospects, regardless of your product, into two: inner-directed and outer-directed. Inner-directed prospects know what they want; your job is to get out of their way, but be there for any obstacles that occur in achieving their goal.

Typically, this is to join, deposit, get a bonus and play. For example, when I go into a store to buy a laptop and having to deal with some sales clerk who knows less about them than I do (and in fact may be financially incentivised to push me to the wrong selection), I know what I want; get out of my way. But the sales clerk may know something I don’t, like how last year’s model is now significantly reduced and the changes were largely cosmetic.

Our inner-directed online gaming prospects benefit from a bit of guidance in their rush to register. No, they don’t need to know of password format requirements; they’re using a sufficiently robust password to begin with and they’re experienced players. But by reminding them that with every play they are accumulating loyalty points they can redeem for cash, this could be welcome news at a new site. So while we don’t want to interfere with the inner-directed prospects hurling themselves through our conversion funnel, we do need to be there to inform and support. This also helps ensure a higher conversion rate, not to mention an opportunity to really introduce the brand voice.

Sure, you could use distracting pop-ups, or unmemorable banners alongside the necessary forms. But those are all one-way communications. You’re talking at the prospect rather than with the prospect. Sinitic.ai, a leading AI-enabled, gaming-focused chatbot provider, or more specifically, an automated intelligent customer experience (AICX), enables operators to engage in “asynchronous conversations” through this process. It uses proactive yet passive messaging through an open, automated chat window. In this window, the chatbot prompts as the player moves through the forms, offering to help but also reminding the player of site benefits and interesting news (e.g. there’s a new game to try or a big match tonight).

Should our inner-directed prospective be intrigued by any of the prompts, they merely have to chat back to the bot. With language-specific NLP (natural language processing) behind the bot, the prospect and the site can have a natural conversation about that topic. They could even discuss any relevant topic the prospect may choose to ask about, such as: What are the odds on Liverpool vs. Arsenal tonight? An integrated chatbot can answer these questions, in real time, as straightforward or cheekily/sassily as you want your brand voice to be.

The outer-directed prospect is just the opposite; they need assistance. They are like the new dad standing in front of 300 choices for car seats for their first baby, with prices ranging from $50 to $500. Only one word comes to mind – help. Here, an intelligent chatbot can walk this prospect through the registration, deposit and bonus processes, field by field if necessary; just as if there was a customer service agent holding their hand through the process, but with no delay, as a human agent would be handling multiple chats and not be truly one-on-one. An integrated chatbot should know where the prospect is in the journey, right down to the field in focus on the form, and prompt appropriately.

Again, the chatbot can also insert “marketing messages,” new promotions that may be of interest, game suggestions for the newbie to try and matches they want to bet on. These all help in the conversion process, not to mention churn; one key reason online casino operators so quickly lose their first players is the players play the wrong game and have a fast bust out, leaving disappointed. This can be prevented through chat-supported onboarding with proactive chat for churn prevention.

In some markets and cultures, prospects skew more to this outer-directed side. For example, in Japan, prospects want to know everything going into a site, while in Vietnam, they do want their hand held. In more mature western markets, inner-directed players may be more prevalent, but the key is automated intelligent chat support for both segments. Speaking of Asian markets, one clear difference between the west and specifically China, is the necessity to leverage one-to-one direct sales communications to bring players onto the site. For China, operators have rooms full of imported Chinese speakers, at no small cost, chatting with prospective and existing players over WeChat and other social platforms. These one-to-one chats for acquisition can also be automated, right down to including the 20% or so of messaging we classify as flirty.

Sinitic.ai's AICX solutions can push messaging through virtually any channel, be it the ubiquitous (and popular) web chat, SMS, WeChat, Line, Facebook Messenger, WhatsApp etc. So wherever your preferred hunting ground for players is, you can set loose an AI-based chatbot to harvest players with the same methodology you use in the call centre. But of course chatbots don’t take breaks, get ill, ask for raises or housing or travel expenses - all real call centre issues. “Chatbots are the new email,” some say. But they are actually better; they are as synchronous or asynchronous as the player wants. They can be chatty and real time (synchronous) or stand-by ready, simply announcing a relevant message that may or may not initiate a reply from the player (asynchronous).

Chatbots are increasingly the preferred way for players to interact with a site; why dig through the FAQ when you can just ask the chatbot? Why not even navigate using the chatbot? “Take me to the game with the biggest jackpot.” Using AI and NLP, Sinitic.ai’s AICX solution can add an entire new level of interactivity to your site, delivering automated acquisitions, improved conversions, reduced churn and better player lifetime values.

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