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Packer-Ho Partnership Surprises Some

MACAU – As reported by the Sydney Morning Herald: "In dealing with Macau's Ho dynasty, the Packers may be risking the house for a place at the biggest game in Asia, writes Hamish McDonald.

"For the past three months, Chinese police and central bank officials have been mounting a publicity drive to stop a hemorrhage of cash estimated at $US70 billion a year that leaves the country through a network of underground banks, many connected to cross-border casinos.

"…At Frontier Square in the neighbouring Chinese city of Zhuhai this week, it was business as usual in the underground shopping mall that funnels Chinese punters to the fast-track immigration hall standing between them and the gambling tables.

"…Officially, the People's Bank of China, the central bank, allows departing travellers to take out only $US4000 in foreign currency and 6000 yuan, the foreign money being obtained after a time-consuming bank visit. Here there was no limit, and a reasonably attractive rate: 1.06 yuan for the HK dollar, shaded down to 1.0595 for the larger amount we were proposing to exchange.

"…The casinos allegedly involved are the dozen operated in Macau by tycoon Dr Stanley Ho's Sociedade de Turismo e Diversoes de Macau, something acknowledged this week by one of the Chinese government's leading advisers in the anti-money-laundering campaign, Dr Liu Renwen, a criminal law researcher with the Chinese Academy of Social Sciences in Beijing.

"…[Ho's] casinos, aside from being the largest taxpayer, are the largest employer in the territory after the government, along with the associated empire of hotels, port and airport facilities, real estate and the jetfoil ferry links to Hong Kong. "In November, it was announced that PBL and Melco would become joint-venture partners for new casino investments around Asia, starting with PBL paying $US163 million for a 28 per cent stake in Macau's new Park-Hyatt hotel and casino project. In projects in China, Ho's group would keep 60 per cent stake and management control. Elsewhere in Asia, the roles would be reversed, with PBL taking the lead.

"…Given this nervousness, some analysts are amazed that PBL has teamed up with Ho, who embodies all the ambiguous and shadowy image of Macau's past, to win over the Singaporeans.

"'I was astounded that Packer would go into business with this gentleman,' says an Australian lawyer closely involved in gaming licensing, who asked not to be identified. 'The Singaporeans are squeaky clean, impeccable. It's interesting, too, that Packer would potentially prejudice his land-based assets here in Australia. Because if it blows up, it can come back and haunt him here.'…"

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