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Arnold M. Knightly

Harrah's to reject NBA bets

5 June 2008

LAS VEGAS, Nevada -- Fans may be getting excited about one of the most anticipated NBA Finals in years, but sports book personnel at Harrah's Entertainment's properties are getting ready for a different type of excitement.

While local sports books are expecting to take in heavy action on this year's championship series between the Los Angeles Lakers and Boston Celtics, sports books at all of the Harrah's properties will be turning bettors away.

That is because Harrah's Chairman and CEO Gary Loveman owns a piece of the Celtics.

Late last year, Loveman acquired a 2.4 percent stake in the storied franchise, prompting the National Basketball Association to require Harrah's to not accept bets on any Celtics game. Other games involving other teams are still allowed.

Loveman, who lives outside Boston and commutes to Las Vegas, declined a request to be interviewed for this article.

The restriction means bets will not be accepted at sports books at Caesars Palace, Paris Las Vegas, Bally's, Imperial Palace, Flamingo, Bill's, Harrah's and the Rio in Las Vegas, about a third of all of the sports books on the Strip.

The company dropped betting lines at Harrah's-branded casinos in Reno, Lake Tahoe and Laughlin and at Harveys Lake Tahoe.

Sports books and the NBA could not have asked for a better matchup with the Celtics and the Lakers tipping off tonight.

Sports books managers are expecting more action on this series than any other in recent memory.

"This is the cream of the crop," said Art Manteris, vice president of race and sports book for Station Casinos. "This is what you hope to see in this type of situation. Two fabled franchises, two big markets, two hot teams with a lot of fan support."

Manteris oversees operations at 14 sports books for the locals gaming company.

Analysts think the potential lost revenue will not be enough to affect Harrah's bottom line. "Sports gaming, while it's important to the casino and provides a competitive advantage over other jurisdictions, the loss of wagers on the NBA Finals doesn't really move the needle for Harrah's," Wachovia Capital Markets bond analyst Dennis Farrell Jr. said.

Farrell said sports wagering contributed 1.4 percent of total gaming revenue on the Strip in 2007.

Of that pool of money, the NBA ranks fourth behind pro and college football and college basketball in the amount of money wagered.

Harrah's, the world's largest gaming company by revenue, generated $10.8 billion in revenues last year.

In Las Vegas, the company generated $2 billion in casino revenues and $3.6 billion in total revenues in 2007.

Gamblers also will not be able to bet on the Finals at the Palms and the Silverton. Those properties' owners have stakes in other NBA franchises.

According to someone familiar with the process, Loveman had expressed interest in owning a piece of the Celtics for years, but his ties to Harrah's made the team's owners wary.

Harrah's recent buyout by a joint venture partnership involving TPG Capital might have helped smooth the way for Loveman's entrance into the Celtics' ownership circle.

TPG Capital co-founder David Bonderman already had an undisclosed ownership stake in the Celtics when his private equity firm began buying the gaming company for $17.7 billion last year.

According to a recent article by the Wall Street Journal, the Celtics are owned by a syndicate of roughly 25 members from the world of private equity, venture capitalism and hedge funds.

The team was bought for $360 million in 2002 by a trio of businessmen who made their fortunes in the financial world.

The group then began selling off stakes in the team to friends and business relationships in the investment world, including Bonderman.

According to people familiar with the process, Bonderman, who now sits on Harrah's board of directors, reintroduced Loveman to the Celtics' owners in late 2006 or early 2007.

Although Loveman was seeking only a small stake, the purchase was rejected by the league's commissioner, David Stern, because of Loveman's role in a casino company.

But Loveman's application was forwarded in April to the seven-member committee that is studying Las Vegas' viability to be the home city for an NBA team and was approved.

Harrah's to reject NBA bets is republished from