Harrah's Exec Hints at Expansion

LAS VEGAS -- Harrah's Entertainment's top executive on Thursday teased shareholders with talk of a looming Southern Nevada expansion, though details of where or when such a move would occur remain undetermined.

Addressing shareholders at the company's annual meeting at the Rio, Harrah's President and Chief Executive Officer Gary Loveman said the Las Vegas-based gaming company's database of frequent customers now totals approximately 28 million people. And many of those people are clamoring for another local property.

"We have a very modest share of gaming activity in Las Vegas," said Loveman, who cited the company's 2,579-room Harrah's Las Vegas property on the Strip as well as the more than 2,500-room Rio at 3700 W. Flamingo Road.

"We believe that we now need more capacity in Las Vegas to satisfy the interests of our customers around the country ... (and) believe the time is right to consider the construction of a new facility, or potentially even the acquisition of an existing one, to add to our portfolio," Loveman added.

Such growth would be consistent with Harrah's recent track record, which includes the pending completion of last September's $1.45 billion acquisition of Horseshoe Gaming Corp.; this year's purchase of the Horseshoe brand in Nevada and the popular World Series of Poker; a potential $1 billion joint venture with the United Kingdom's Gala Group; the new U.K.-based online gaming venture LuckyMe; and Harrah's continuing partnerships with tribal leaders to operate Indian casinos in four states.

Still stinging from a recent gaming tax increase in Illinois, Loveman said the company would work to avoid expanding in "unenlightened" jurisdictions and instead focus on developing within stable, core markets such as Las Vegas, New Orleans and Atlantic City.

Loveman said Harrah's executives are particularly optimistic about the Las Vegas market, as evidenced by a recent surge in visitor and gaming activity that will likely be supplemented by next year's planned debut of the $2.4 billion Wynn Las Vegas resort.

"We refer to it as the sort of casino God would build if he had the money," Loveman joked, adding Wynn Las Vegas' debut will mark "a new wave of casino building, a wave we plan to ride and participate in."

Loveman said it's premature to discuss Harrah's specific plans for this market, though industry sources have speculated the company hopes to buy or develop a Strip resort, possibly featuring the Horseshoe brand.

Loveman also noted Harrah's continuing efforts to maintain "a pristine reputation for corporate and financial integrity." The company's stated commitment to clean books may have figured in its shareholders' decision to vote down a Washington-based group's efforts to further open the company's political contribution records.

The Center for Political Accountability, a public interest group created last fall, had hoped Harrah's shareholders would approve such a resolution. The group claimed shareholders have a right to know in greater detail how their company spends its money on politics.

However, at the unified recommendation of Harrah's board, approximately 66 percent to 67 percent of shareholders' votes reported through Thursday were against further disclosing the company's political spending. Among other objections, Harrah's Chairman Phil Satre said such a step is unnecessary in what's already a highly regulated industry.

Following the meeting, center representative John Richardson said he's pleased nearly 7.5 percent of the reported vote favored his group's resolution. He hopes to further lobby shareholders from Harrah's -- and other large companies such as Union Pacific Corp. and Wells Fargo -- on behalf of changing their corporate disclosure policies.