Stanley Choi’s IEG to Operate Some PokerStars-Branded Events in Asia
Here’s an interesting tale likely having its roots in China’s looming ban on Texas Hold’em (poker) apps, as part a move to stomp out illicit underground poker games in the country. International gambling whale Stanley Choi and his Hong Kong-based International Entertainment Corporation (IEC) have entered into a “cooperation agreement” with PokerStars, in which Choi will help operate Stars-branded events in “certain Asian countries.”
Those countries likely include mainland China (where poker is taking a big hit) along with the Chinese possessions of Hong Kong and Macau, though few specifics are offered. The disclosure by Choi’s IEC came on May 17, 2018, in accordance with Hong Kong Stock Exchange rules, where the Cayman Islands-registered company is listed.
Here’s the heart of the statement offered by IEC:
THE COOPERATION AGREEMENT
The board (the ‘‘Board’’) of directors (the ‘‘Directors’’) of the Company is pleased to announce that on 17 May 2018, Lucky Genius Limited, a wholly-owned subsidiary of the Company, entered into a live events and poker room collaboration agreement (the ‘‘Cooperation Agreement’’) with a member company of The Stars Group (‘‘Stars Group’’), whereby, among other things, Stars Group has granted Lucky Genius Limited the right to operate land-based live events and poker rooms under the branding of PokerStars in certain Asian countries.
As is typical in these matters, the official disclosure barely scratches the surface. The deal between Choi and The Stars Group (TSG) comes less than two weeks after the sundering of PokerStars’ prior Macau agreement with Melco Entertainment’s City of Dreams Casino. The ending of that deal came from Melco’s seeming cold corporate feet in the wake of the Chinese poker ban; the ending of the City of Dreams deal, which included the PokerStarsLIVE room at the casino, came with little advance warning.
It wasn’t the only poker-room closing in Macau, even if the former Portigues territory and global gambling hub isn’t supposed to be directly impacted by the mainland poker-app ban.
Yet how this deal might have come to be is rather more interesting than the deal itself. Chinese media reports stated that PokerStars checked with other Macau casinos after City of Dreams ended their deal, and found no takeers for a replacement site for Stars events in Macau. That’s where it gets presumptive, as to whether TSG contacted Choi or whether Choi offered his services, the latter being the more likely option.
The IEC statement indicates that Chois and IEC’s hotels and entertainment venues in those “certain Asian countries” might serve as hosts to Stars-branded events:
It is the Company’s intention to diversify the business of the Group, whilst maintaining the Group’s core businesses of hotel operations and leasing of properties for casino and ancillary leisure and entertainment operations. The Board believes that the arrangements under the Cooperation Agreement could achieve this objective.
And then again, it’s also possible that Choi and IEC’s Lucky Genius Limited entity will serve in a front-man / intermediary role within the China gambling sphere. Choi is far more an insider in Chinese business politics than The Stars Group, and would thus be expected to have an easier time with regulatory and licensing matters.
Yet there are some question marks regarding Choi as well. He also has connections (as one would expect of a Chinese gambling whale) with the junket world that has also come under attack from Chinese authorities in recent years. Choi figured as a tertiary character in the very-high-profile Paul Phua illegal-bookmaking case, was also involved in some way in the bizarre (and partially falsified) takeover attempt of TSG by David Baazov, though he’s been part of many legitimate gambling and casino deals as well. He can play a bit of poker, too.
The cooperation deal, however, might be less about what Choi can do in China and its territories and more about what The Stars Group can’t. There’s also a bit of a hot-potato feel to the whole arrangement, with TSG not announcing the agreement on its corporate website to date. The Macau and China events may not have a large enough material impact for Stars’ corporate parent to warrant such a special announcement, but it’ll be interesting to see what news from the region emerges in TSG’s Q2 results, likely out in early August.