Harrah's
Reveals Spanish Casino Plans
Harrah's Entertainment Chairman
Gary Loveman racked up the frequent flier mileage
in November, concluding the month by announcing
the company plans to co-develop a Caesars casino
resort in the master-planned El Reino community
of Ciudad Real, 118 miles south of Madrid.
The
announcement capped a month of international
development activity for the world's largest
casino operator.
On
Tuesday, Harrah's said it signed a memorandum
of understanding with Slovenia's largest casino
operator to develop a luxury casino resort in
Nova Gorica, Slovenia. Earlier in November,
Harrah's announced plans to enter the Bahamas,
signing a letter of intent with Baha Mar Resorts
and Starwood Hotels to create an 1,000-acre
destination beachfront resort.
In
all three developments, which total almost $3
billion in investments by Harrah's and its partners,
the casino complexes will be the largest of
their kind in each particular country.
And
Loveman has the company's sights trained on
one additional international project, one of
two potentially lucrative casino locations in
Singapore.
In
an interview Wednesday from Madrid, Loveman
said there is a marked change in international
gaming attitudes, especially in Europe. Casino
customers are desiring more of a Las Vegas-style,
all-inclusive resort experience rather than
the traditional small and intimate setting.
Most
European casinos, he said, offer limited services.
"I
think this project (in Spain) and the projects
we've announced show that international customers
are attracted to the Las Vegas resort setting,"
Loveman said. "These projects are all in
important markets where there isn't a high-quality
gaming experience."
The
projects offer an avenue for Harrah's to bring
the Caesars brand, which the company purchased
in June as part of its $9 billion buyout of
Caesars Entertainment, into international jurisdictions.
He said, however, Harrah's was still assessing
whether to use the Caesars theme in Slovenia,
which borders Italy and is expected to draw
upon a large Italian customer base.
Loveman
said the three projects, which include casinos,
upscale hotels, golf courses, spas, retail,
entertainment and other amenities, could all
be under construction at the same time next
year.
"After
the merger, we set aside the organizational
resources to create a unit of people dedicated
to building new Caesars projects," Loveman
said.
In
Singapore, Harrah's is hoping to land the casino-resort
contract in the Marina Bay district with its
partner, Keppel Land, a Singapore-based real
estate developer. Loveman said if the company
doesn't win the bid for that site, it will bid
on a second Singapore project.
Loveman
said the recently announced international projects
will play a role in showing the Singapore government
that Harrah's is committed to international
development.
"(Singapore)
is a beneficial byproduct, but that's not the
primary reason behind these developments,"
Loveman said. "These are terrific business
opportunities for the company."
Harrah's
will finance the international projects differently
than its domestic projects, Loveman said. And
with partners, the company won't be responsible
for the entire project.
Wall
Street seemed somewhat supportive of the deals.
Shares of Harrah's traded up as much as $1 higher
for part of Wednesday's session on the New York
Stock Exchange. However, Harrah's ended the
day lower at $68.07, off 45 cents, or 0.66 percent.
Deutsche
Bank gaming analyst Marc Falcone said the international
investment is low risk with limited capital
but offers a high return that includes increased
brand awareness.
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