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Gaming Guru

Rod Smith
 

Inside Gaming: Harrah's May Spell Expansion C-a-e-s-a-r-s

3 April 2006

Plans are afoot for a $1 billion expansion of Caesars Palace, with an announcement due in four or five months, street sources say. The new Augustus Tower already is increasing foot traffic and returns on investment in the casino, but scuttlebutt is that owner Harrah's Entertainment is confident quality can be increased and more high rollers can be reeled in with a top-flight expansion. Caesars Palace has been a landmark on the Strip for 40 years, but insiders say you haven't seen anything yet.

Analysts are giving thumbs up to Wynn Resorts Ltd.'s plans to increase the scope of Encore, its second Strip tower. Lost in the chatter over the project's new $1.74 billion tab are plans to increase the project to 2,054 rooms, add an employee pedestrian bridge and move employee parking. It's smart, analysts say, because it helps pave the way for building on the golf course land in a couple of years. Everything over $1.52 billion will be paid for with bond "add-ons" and cash from Wynn Resorts, analysts say. "It's a smart approach to master-planning the 170 acres (Steve) Wynn has on the backside of Wynn Las Vegas."

It looks as if the question of a tribal casino in Barstow, Calif., a development that could deter visits to Primm, is headed to a vote June 6. Detroit-based Barwest's lawsuit to block the vote was shot down in court late last month, after the City Council took a pass. The ballot measure would designate a casino zone, exclude the Barwest hotel-casino, and green light a tribal proposal with dubious financing. Barwest is headed by Marian Ilitch, who bought MotorCity Casino from MGM Mirage.

In honor of gaming's worldwide expansion, Forbes recently published a list of the 13 hottest casinos worldwide. Of all the casinos in Las Vegas, only Wynn Las Vegas made the list. No. 1 was the Atlantis Resort in the Bahamas, a Kerzner International operation, and No. 2 was Borgata in Atlantic City, a joint operation between Boyd Gaming Corp. and MGM Mirage. Forbes selected the casinos based on design, location and availability of entertainment, lodging and dining options.

Higher mortgage rates already have dampened demand and prices for housing. And analysts say rates on 30-year fixed mortgages could hit

6.7 percent by year's end. A housing bust could sink prices 25 percent. More than hitting Las Vegas directly, however, where boomers keep the market hot, gaming execs worry higher rates could undermine consumer confidence and spending, send the hospitality industry reeling, and torpedo the casino industry as surely, although perhaps not as severely, as another terrorist attack.

Gaming Wire Editor Rod Smith can be reached by phone at 477-3893 or by e-mail at rsmith@reviewjournal.com.