SEARCH NEWS:

 

Harrah's Acquisition of Players International Delayed Again

Harrah's, one of the major operators of land-based and riverboat casinos, agreed to buy Players in August. The $425 million deal means that Harrah's would acquire the Players casinos in Metropolis, Illinois; Lake Charles, Louisiana; and St. Louis, Missouri. Harrah's would also get a racetrack in Kentucky that Players owns.

The transaction has been approved by both companies' shareholders and regulators in all of the affected states except Illinois. The companies can't close on the deal until Illinois okays it.

But an unrelated lawsuit there has the Illinois Gaming Board worried. The suit stems from a dispute over another license, and it questions the constitutionality of major changes to Illinois' riverboat gaming law that were made last spring.

One of those changes eliminated the prohibition against one company holding a casino license for more than one site. Harrah's has long operated a riverboat casino in Joliet, Ill., and consummation of the Players deal would give Harrah's two casinos in the state.

The board wants to know what Harrah's would do if the suit is successful and last year's changes are tossed out. Gary Thompson, Harrah's spokesman, said the company has presented a contingency plan to the board.

If the state Supreme Court invalidates the changes and ownership of more than one license is not allowed, Thompson said, Harrah's plans to put the Metropolis casino in a trust. That would enable it to continue operating, he said, while the company sought a qualified buyer.

Ironically, the Illinois legislature's revisions to the gaming law made it possible for Harrah's to outbid another suitor when Players put itself up for sale. Previously, the one-license limit had kept Harrah's from bidding.

Tuesday's scheduled meeting of the board was canceled for lack of a quorum. The next meeting is set for March 21, but Thompson said Harrah's hopes the board will call a special meeting sooner than that to consider its contingency plan and approve the deal.

Players has promised regulators in Louisiana that it would sell its casino in Lake Charles. To settle problems related to a scandal centered around former Gov. Edwin Edwards, Players paid $10.8 million and made the commitment to sell.

Also Tuesday, Harrah's announced that Gary Loveman has been elected to its board of directors. He's a former associate professor at the Harvard Business School who joined Harrah's as chief operating officer in 1998.

Prior to that, Loveman had consulted with Harrah's, especially in the area of customer loyalty programs. He's also on the board of National Airlines. National, which like Harrah's is based in Las Vegas, is partly owned by Harrah's.

< Gaming News