As Stanley Ho prepares to cash in his chips, an uncertain future for SJM

By Farah Master

HONG KONG (Reuters) - Macau's oldest gambling company, SJM Holdings, is playing catch up as its rivals ride the wave of a gambling boom in the southern Chinese territory.

SJM, which is controlled by the family of Stanley Ho, is facing an unclear leadership future and the delayed opening of its planned $4.6 billion casino resort in Macau's Cotai strip.

The departure of Ho, who is one of Asia's richest men, once he retires as chairman of SJM on June 12, could spark a power struggle at the company, analysts say.

The flamboyant 96-year-old tycoon, one of Hong Kong's best-known businessmen, has had four wives and 17 known children.

While he had stepped away from the day-to-day running of the company over the past five years, his departure leaves a muddied succession plan, with the chairman's office expanded to four people, including one of his daughters and his fourth wife.

His third wife will also become a director of the company, according to a statement released by the company in April.

"This complicated structure, in our view, leaves room for a potential power tussle within the board given the lack of clear control," said DS Kim, an analyst at JP Morgan in Hong Kong.

SJM did not respond to requests for comment.

Ho, who has overseen the transformation of the once-sleepy Macau into the world's biggest casino centre, held a monopoly until 2002 when the former Portuguese colony licensed five other operators to run casinos.

SJM, which operates the fluorescent onion-shaped Casino Lisboa, has seen its market share erode from over 30 percent a few years ago to 15 percent currently. The company is rapidly losing out to rivals ahead of the opening of its new casino on the fast-growing Cotai strip.

The Grand Lisboa Palace casino is unlikely to open until late 2019, with some analysts even expecting an opening in 2020, when SJM's casino license will expire.

Construction delays and government regulations have led to several delays from the original opening date this year.

SJM also competes in Macau against Melco Resorts, which is controlled by Ho's son Lawrence Ho, and MGM China, in which his eldest daughter Pansy Ho is the co-chairperson.

There is also increasing competition from other Asian locales including the Philippines, South Korea, Cambodia and Singapore, which are all vying for wealthy Chinese spenders.

SJM's new resort will feature hotels designed by Versace and Karl Lagerfeld, but the company has lagged in providing non-gaming facilities, which authorities have been demanding as a means for Macau to diversify away from gambling tables.

In 2011 Stanley Ho sued family members in a high-profile dynastic fight in which he sought to recover billions of assets after a share restructuring he said was done without his consent.

The dispute was settled after two months but gave an insight into the factious nature of Ho's family and the lifestyle of one of Asia's wealthiest families.

SJM's shares have traded roughly flat since the announcement on April 12 with analysts stating their neutral stance on the stock.

"Instead of using Stanley Ho's retirement as an impetus to make governance and management changes, the company has opted to further entrench the status quo," said Vitaly Umansky, analyst at Sanford C. Bernstein in Hong Kong.

Under the management appointments announced in April, SJM appointed Ho's daughter Daisy Ho as chairman and executive director. Timothy Fok and Stanley Ho's fourth wife, Angela Leong, have been appointed co-chairmen and executive directors.

Ambrose So, the current chief executive has been appointed vice-chairman and executive director. Ho's third wife, Ina Chan, was appointed as an executive director.

(Reporting by Farah Master; Editing by Philip McClellan)