The inventor

Baccarat, junkets, vip rooms, all STDM creations that continue to mark Macau’s casinos.

MB Feb 2020 Special Report | Casino Lisboa – 50 Years


Gambling has changed a lot since liberalization, with the entry of US players, but it has changed mainly in terms of quantity.

Of course, Sands or Wynn casinos are much different from older ones from STDM, but, once again, we’re talking about looks, perception, marketing, brightness, and color.

It is said that prior to liberalization, a customer at a STDM casino had to pay for the drink, even though he was spending a lot of money (outside the VIP rooms, of course).

US operators brought another quality of service, giving another ‘importance’ to the customer.

But the way people gamble today in Macau is the same as it was 20 or 30 years ago.

For example, Las Vegas is made with slot machines; in Macau, they are almost nonexistent. By contrast, baccarat has a ridiculous expression in the capital of Nevada, while here it is domineering.

Another very relevant example: Sands and company would rather not have to deal with gambling promoters, who have to pay high commissions without controlling the operation, but had to adapt and live by these exact rules.

What do baccarat and junkets have in common?

They appeared in Macau by the hand of Stanley Ho.

Both baccarat and junkets were of no importance before STDM won the license in 1962.

Baccarat, as a card game, had already been invented in Italy, but few would imagine that it would umbilically attach itself to the Chinese gambling after appearing in 1966.

“There is no doubt that in 1975 Baccarat was widely studied at STDM,” says the author of the book “Os Casinos de Macau” (The Casinos of Macau), published last year. “The rise of Baccarat is undoubtedly the great phenomenon of these years,” adds the University of Macau professor, noting that in 1977 this was already Macau’s main game and in 1984 it represented 65 percent of the market.

As Jorge Godinho also writes, at least since the 1930s, the use and remuneration of client raisers has been known. But it is “the advance of mathematical knowledge of Baccarat variants that allows one more step.”

And the step is to “give away some of your expected profit,” says Mr Godinho, with declining revenues being offset by increased stakes.

STDM sold this part to speculators selling tickets for Hong Kong boats at higher prices and making the deal more difficult: ticket dealers abandoned the ferry terminal and received ‘dead chips’ to deal with potential customers.

The activity of the junkets began there.

From two other originalities: the concessionaire of credit for gambling and the hiring of specific rooms of the casino, for VIP games, in partnership with the junkets. The first appeared in 1984.

Stanley Ho was right when he said, after the entry of his new competitors, that “the success of one market model cannot be migrated to another. Ignoring Macau’s special characteristics and duplicating a Las Vegas or an Atlantic City would not be a successful strategy.”

It was not Macau that adapted to the casinos of Las Vegas, it was these that adapted to the reality of Macau – to the point that what we know until now as the profile of the Chinese gambler (high roller or mass market) was an invention of Stanley Ho. “STDM was the key to Macau’s effective transformation into a modern and developed economy,” writes the author of “Os Casinos de Macau.”


“STDM was the key to Macau’s effective transformation into a modern and developed economy” – Jorge Godinho

Once here, the reader will ask: if so, why did SJM lose market leadership and few believe that it can return there?

There will be several reasons, but one seems obvious: STDM has not prepared for the arrival of the competition.

As mentioned before, the Hotel / Casino Lisboa was a breakthrough in 1970, but in 1999 it remained the company’s ex-libris, although there were already 11 casinos.

The big answer came only in 2008, with the opening of the Grand Lisboa.

And the arrival at Cotai is a rather embarrassing story.

No one can say that SJM would be leading among the six operators if it has anticipated the arrival of Las Vegas.

But maybe not so far behind …


Crime

“Through the STDM’s sub-contracting system, triad members gradually infiltrated casinos to control the selling of gaming chips. Loan-sharking proliferated in casinos as triads attempted to reap quick profits from casino gamblers. Triad members viewed the control of VIP rooms and gaming chips as a zero-sum game in which retaliation against individuals and competitors often led to bloodshed,” wrote Sonny Lo (Casino Politics, Organized Crime and the Post-Colonial State in Macau).

“The infighting amongst triad members, however, very soon escalated out of the STDM’s control. In short, organized crime in Macau’s casino industry began to grow in the wake of the STDM’s administrative decentralization,” adds the Hong Kong-based researcher, to whom “by contracting out gaming rooms to different interests, the STDM became a victim of its new style of casino management. The emergent triads that penetrated and operated casinos no longer regarded the STDM as an authoritative arbitrator of their disputes.”

“Unfortunately, some people still think that Stanley Ho knows too many triads and are connected with the triads. This is very unfair, a real misconception,” commented the STDM founder, adding: “I don’t need them, and I don’t like them.”

In a 2016 study (Triad Organized Crime in Macau Casinos: Extra-Legal Governance and Entrepreneurship), two Hong Kong academics stated that triads continue to treat the VIP rooms in Macau.

In a 2016 study (Triad Organized Crime in Macau Casinos: Extra-Legal Governance and Entrepreneurship), two Hong Kong academics stated that triads continue to treat the VIP rooms in Macau.