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Gaming Guru

Jeff Simpson
 

Harrah's Showing Interest in Purchasing Horseshoe Brand

22 December 2003

Harrah's Entertainment's interest in buying the Horseshoe brand name led to recent talks between the company and Binion's Horseshoe, Harrah's executives said Friday.

Binion's, which owns the Horseshoe brand in Nevada, has talked with Harrah's lawyers about the sale of the brand, which Harrah's Chief Executive Officer Gary Loveman said in September the company would like to acquire.

Loveman's comments came after Harrah's Entertainment inked a $1.45 billion deal to buy Jack Binion's Horseshoe Gaming Holdings and its three central U.S. riverboat casinos.

"Gary (Loveman) has made it very clear that because of the power of the Horseshoe brand, we want to own it everywhere, including in Nevada," Harrah's spokesman Gary Thompson said. "There have been talks."

Thompson was unable to say how often the parties have met, whether Harrah's wants to buy the casino or just its brand name or whether they're close to a deal.

But industry insiders believe Harrah's wants to buy just the brand, not the property.

One advantage Harrah's has in its negotiations with Binion's Horseshoe owner Becky Binion Behnen is that Harrah's acquired a $16 million note that Behnen gave brother Jack as part of her 1998 deal to acquire the lion's share of the property.

The note is in default and, with accrued interest, would now cost between $19 million and $20 million to pay off.

The note could allow Harrah's to foreclose on the 52-year old landmark hotel-casino, a right that could add leverage to any Harrah's purchase attempt.

Harrah's possession of the note became public because of a continuing legal dispute between Binion's Horseshoe and the Fremont Street Experience.

The battle over at least $3 million in unpaid operating levies to the downtown pedestrian mall has yet to be decided, Fremont Street Experience lawyer Pat Reilly said this week. A judge has yet to be appointed to the case and no trial date has been set.

Behnen didn't return a phone message Friday, but her husband, Nick Behnen, said in September that they're interested to hear what Harrah's has to offer.

"We haven't heard anything yet," Behnen said at the time, noting that a Harrah's purchase of the downtown casino would speed up an unstoppable trend. "All the little joints will eventually sell to the big boys."

The Federal Trade Commission is reviewing the Harrah's-Horseshoe Gaming deal to see if it violates antitrust rules; Thompson said the company will have provided the regulatory commission all the information it requested by the end of the year.

Thompson said the company hopes to complete the Horseshoe Gaming Holdings purchase by the end of June.

Jack Binion owns a small piece of the downtown casino as a way to maintain his Nevada gaming license; that piece is not part of the Harrah's acquisition of Horseshoe Gaming Holdings.

Harrah's Showing Interest in Purchasing Horseshoe Brand is republished from Online.CasinoCity.com.