James Packer ends alliance with Ho and retreats to Australia

Ever since Packer began selling Crown Resorts' shares in Melco Resorts & Entertainment, Ho family's casino business experienced a sudden growth which has mapped out a global expansion strategy similar to now-abandoned plans Packer fostered for a decade.

Ho was last week given approval to spend half a billion euros building Europe's biggest casino complex in Cyprus, where he hopes to attract wealthy Russian, British and Middle Eastern gamblers.

Even though he has boasted of making "$3 billion" from selling his 34 percent stake in Melco, Packer has privately and publicly expressed disappointment at what experts say was a reluctant sale.

A one-third stake in Melco, which generates most of its income in Macau, is worth almost $6 billion today, or about half Crown Resorts' market value.

"I regret deeply that Crown is no longer a shareholder in Macau," Packer said in a newspaper interview last year.

The missed opportunity to significantly increase his own wealth, and that of his fellow Crown shareholders, illustrates the high cost of Packer's decision to reverse strategy.

Crown started selling just as Melco shares hit their weakest prices in years. In mid-2016 Crown sold part of its stake for USD 15.50 for each American depositary share. Later that year it sold another big chunk for USD 18.

The Melbourne-based company was so worried about Melco's prospects that in December 2016, it paid for contracts to guarantee it would get USD 16 a share for half its remaining stake. Locked into the price when the shares started to take off, it sold out entirely six months later at an average price of USD 17.91.

Since the death of his father in 2005, Packer has wanted to establish a reputation as a visionary business operator. Not only was the 50-year-old a leading advocate of closer business ties with China before Crown decided to focus on Australia last year, he planned to build a global entertainment business under the Crown brand that would include casinos, hotels, restaurants and entertainment.

The Crown name will be removed from City of Dreams Manila casino on Tuesday, January 16.

In Ho, also the son of a hard-driving self-made billionaire, Packer thought he had the perfect partner. As co-chairman of what was then called Melco Crown Entertainment, Packer and Ho were so close that Ho once described their relationship as like a marriage because "we have gone through tough days and appreciate the good days even more".

"Lawrence and I have got a special friendship and a special relationship," Mr Packer said in 2013. "May the good times last."

Ten years younger, Ho is now pushing ahead with his own global ambitions solo, using a remarkably similar strategy to his former partner. Mr Ho plans to take his sleek, upmarket casinos from Macau, the world's biggest gambling location, and eventually challenge the utilitarian casinos popular in Las Vegas and elsewhere.

"Traditionally we've been Asia based but we have global aspirations and want to be a 21st-century gaming operator," Ho told Bloomberg last week.

His first two targets are Europe and Japan. Cypriot President Nicos Anastasiades last week announced – at a packed presentation at the presidential palace – that Melco and a local partner had been granted exclusive rights for 15 years to operate a casino in the island nation.

Named the City of Dreams – Mediterranean, the complex will have 11 restaurants, wave pools and 1200 gaming machines.

Melco's success in Cyprus shows that it can win a competitive bidding process for a casino license outside its home market.

The exact circumstances of Crown's withdrawal from Melco are unclear. Packer, who owns about half of Crown, has acknowledged that the arrest of 18 Crown employees in mainland China triggered the sale.

He hasn't confirmed speculation by China business experts that the Ho family was worried about being associated with Crown given that Macau is under Chinese rule. But subsequent comments reinforced perceptions that he was embarrassed by his Australian partners and was happy to buy them out.

"In all of those instances, you had casino salespeople running around offering credit, talking about collection ... it wasn't discreet," Ho told the Financial Times last year. "That's what caught their attention: 'Like what the hell, you're deliberately spitting on our faces'."

A Crown spokeswoman said the Melco investment was very successful because it generated six times the cash Crown invested, and the sale allowed the company to cut debt, pay dividends to shareholders and invest in its planned Sydney casino.

This week will mark a final step in the separation between the two companies. Melco plans to remove the Crown name from a hotel at its City of Dreams casino in Manila on Tuesday. It will be replaced with the name of a heroine from Chinese mythology, Nüwa.