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Oceanus: You Can't Teach An Old Whale...

Much like any casino titan, the press love SJM's Stanley Ho. They lend a certain amount of mystique to the man that, admittedly, in some ways I share. Some love to give post-hoc rationalizations how sly Mr. Ho is. In the end though, Mr. Ho could very well be just a former monopolist, fallen from grace, and struggling to regain stability. Witness what happened to the new Oceanus Casino.

Mr. Ho announced the Oceanus in 2006. The proposed was a 600 room hotel, casino, retail, and office complex would dominate the views around the ferry terminal serving Hong Kong:

It was billed not only announced as luxurious, but a perfect fit for Macau. When it was announced, the Galaxy Cotai, Venetian Macao, and the rest of Cotai was well underway. In other words, there was no change in projects at any time between then and the next SJM announcement. Two years later, and well before the financial crisis, Mr. Ho proclaimed:

"we must all agree that in Macau now we have far too many casinos and there is no point of opening up more casinos... I Stanley Ho will not agree with the Oceanus project, I think too big, too much, we can not operate such a huge project involving so many factor."

What changed between the two? Was there actually too many casinos? No, there was going to be as many the day the original Oceanus was announced as there were when he killed it. (In fact, one could argue FEWER casinos, as Studio City's construction mothballed).

Even if we were going to take Mr. Ho at his word, that there are too many casinos, why did he still open up Oceanus in December 2009? The spin was it was not a new casino, but technically an expansion of the decrepit Jai Alai casino. See? it's not new, just a massive expansion. Can you hear my eyes roll?

The new casino expansion remodeled the former Yaohan department store. One would think there is some innovative architecture. Alas, it is China and we have a stodgy old monopoly. Why build new when you can copy? In this case the Oceanus is modeled after the swimming pool of the Beijing Olympics (“Patriotically” modeled some say). A video of the new Oceanus at opening:

So why go to the Oceanus? Innovative? Luxurious? Great atmosphere? Nope! Same reason people trundled to the depressing Jai Alai Casino, it is close and functional. As one SJM spokesperson sold it to the WSJ, "You can gamble for three or four hours before your wife even knows you're in Macau." Yeah, that extra 5 minutes, maximum, to get to the Sands across the street makes all the difference to the ball and chain.

SJM: Struggling to raise capital, bitching about competition and begging for re-regulation, and not catering directly to consumer demands. Sounds like a boring old monopoly to me.


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