James Packer’s Asian casino partner Lawrence Ho says its PBL joint venture made some early mistakes with its first casino project, Crown Macau.
Mr Ho, son of casino billionaire Stanley Ho, said „Melco PBL didn’t get off to a good start.“
„We went away from my original vision – which was a high-roller, six-star, VIP property – and tried to squeeze in too many slot machines“, in order to boost profit margins.
„We chased that foolishly,“ Mr Ho said. His comments were part of an interview with Forbes Asia magazine, in which he also talked about his desire to expand outside Macau and what had attracted him to the Packer partnership.
„Investors don’t pay us to learn,“ Mr Ho, 30, said.
„The important thing is how quickly we react to these things and how we will do it next time.“
Melco had responded by repositioning Crown Macau’s mass gaming market to „target the premium segment“.
Last month, it entered into a three-year gaming promotion deal with Ama International. Ama will exclusively promote VIP gaming business at Crown Macau.
Melco’s next project is the USD 2.1 billion (AUD 2.4 billion) City of Dreams casino.
„From day one my philosophy for City of Dreams has been to be complementary to the Venetian (across the street),“ Mr Ho told the magazine.
The Venetian – the biggest casino in Macau – is owned by US billionaire Sheldon Adelson.
„You don’t always have to go head-on. In Las Vegas people didn’t go head-on. They said: ‚Let’s adapt‘.
„If the Venetian wants to focus on retail conventions, we want to focus on entertainment.“
Melco’s casino ambitions don’t stop at Macau. Thailand and Japan are also in the frame.
„We know mainland China and the politics involved,“ he said. In the rest of Asia, having PBL involved is going to take us a long way.“
Commenting on the Packer partnership, Mr Ho said he had joined forces with the then Publishing and Broadcasting Ltd in part because it wasn’t a US company.
„Ultimately, since it (PBL) had a well-defined Asia database and offices all over Asia, it understood what we were trying to do much better, especially on the VIP end,“ said Mr Ho.
„The US players hadn’t really gotten their heads around Macau yet.
„Culturally, they didn’t understand Chinese people.“
That understanding brought Mr Ho and Mr Packer together in 2004, when they formed the Melco PBL joint venture. PBL was formally demerged this week, with its gaming business Crown Ltd making its debut on the Australian Securities Exchange. Crown holds a 41.4 per cent interest in Melco PBL.