Harrah's CEO Addresses Harrah's - Caesars Merger

Destination visitors from the Midwest represent a strong demographic for Las Vegas, a statistic that has become even more pronounced since Iowa gave birth to the riverboat casino industry in 1990, followed in quick order by Illinois, Missouri and Indiana.

Rather than take appeal away from Las Vegas, the emerging markets created a new legion of casino fans who view Las Vegas as the "Gambling Capital of the World". Travel and tourism there is stronger than it's ever been, and the market continues to grow and develop with new casinos and thousands of new hotel rooms every year.

The most significant development in the gaming world in quite a while became official early last month when the merger between Harrah's Entertainment and Caesars Entertainment was finalized, creating the biggest casino company in the world and a presence in Las Vegas that no single company ever had.

Even though Harrah's was represented by properties in every gaming jurisdiction in the United States prior to the merger, its impact is even more pronounced now that the powerful and high profile Caesars brand is under its expansive corporate umbrella.

Gary Loveman, the CEO of Harrah's Entertainment, addressed the media and responded to questions in a Webcast the morning after the merger became official.

When asked why he sought the merger, he explained that as well known and popular as the Harrah's brand is with recreational gaming enthusiasts nationwide, the company still lacked a luxury option in Las Vegas. The acquisition of Caesars fills that void:

"If you're a Harrah's customer and would like to come to Caesar's Las Vegas, go to the Forum Shops, hear Celine Dion, and stay in the beautiful surroundings that I'm seated in this morning at Caesar's, all of that is now available to you in a way that was never true before," Loveman said.

"Indeed, we discovered through our research that Harrah's customers around the country when visiting Las Vegas seeking a luxury accommodation more often than not went to Caesar's Palace. So now that is a very easy thing for our customers around the country to do.

"They'll have available to them a level of branded alternatives and a level of amenities in more markets across the country than ever before. They'll have a loyalty program that makes it easy for them to visit us, in fact encourages them to do so, unlike any other loyalty program in consumer businesses in this country. So it's a clear winner for gaming enthusiasts across the country."

Loveman, while commenting that the unfriendly tax structure and unstable political situation in Illinois inhibits capital expenditure in the properties it owns there, elsewhere around the Midwest the company is thinking aggressively.

In Northwest Indiana, for example, there could be big plans on the horizon for the Horseshoe Casino Hammond. Since acquiring the popular Horseshoe brand last year, Harrah's has been enthusiastic about capitalizing on its recognition and popularity in local markets, including Iowa and elsewhere.

"We are in the process of expanding in North Kansas City," Loveman noted, "including building a new hotel there and adding a variety of casino and non-casino amenities. That process continues. We just completed a large expansion of the St. Louis facility and we have in mind a significant expansion of non-gaming amenities there as well. We're building a new Horseshoe Casino alongside Bluffs Run race track in Council Bluffs, Iowa, a project which continues on pace. We do not have plans for significant new projects that we've not yet announced in that part of the country although I certainly wouldn't preclude them as competitive circumstances may change."