Casino news source: Sun Herald: http://www.sunherald.com
Harrah's has plans for Biloxi
New project will be announced in May
By TOM WILEMON
tewilemon@sunherald.com
BILOXI --
Gary Loveman, chief executive officer of Harrah's Entertainment, said Wednesday the company will announce in May plans for a project in Biloxi.
He provided few details except that the majority of the project will be on the south side of U.S. 90. Harrah's already owns the Grand Casino Biloxi and has acquired land on several blocks surrounding the casino, including the Casino Magic property formerly owned by Pinnacle Entertainment.
Loveman made the comments in a conference call with reporters from a seminar in New Orleans sponsored by the American Gaming Association focusing on hurricane recovery. Five months ago Loveman said the company was putting its Biloxi plans on hold because of high construction costs and a volatile marketplace. Harrah's had been expected to make some type of announcement last summer about its plans for Biloxi.
Wednesday's comments from Loveman come the week after the company's shareholders approved a buyout by two private-equity groups, Apollo Management Group and Texas Pacific Group. Harrah's Entertainment will continue to operate under the same name and Loveman will remain at the helm.
Many analysts have expected the company's new owners to sell off some holdings to offset the cost of the buyout, but Biloxi isn't likely to go on the auction block if the company is investing here, according to Dennis M. Farrell Jr., a gaming analyst for Wachovia Capital Markets.
"I don't think it's just Gary Loveman calling the shots," Farrell said. "He came out publicly and said they are committed to the Gulf Coast. I think that's a decision they've all made together, not just Gary. They must see some upside in the market."
Harrah's market share on the Mississippi Coast has diminished since the rebirth of the casino industry. Before Katrina, it had the most slot machines and table games with casinos in Biloxi and Gulfport. The company sold its Gulfport property.
Harrah's has expanded its footprint in Biloxi and has enough room to introduce some of its other brands, such as a Horseshoe Casino.
Farrell said he's interested to see how much Harrah's will invest because it may give an indication of the company's new direction.
"People were believing they were not going to come back to Biloxi and build," Farrell said. "I think the fact that they are committed to coming back to Biloxi and building shows they believe there is a substantial upside in the Biloxi market."
Frank J. Fahrenkopf Jr., president of the American Gaming Association, and Brian Sanderson, president of the Gulf Coast Business Council, also participated in the conference call. They announced survey results that show overall confidence in the casino industry over the next 10 years.
In New Orleans, the customer base of Harrah's has changed. Now 80 percent of the business comes from locals, Loveman said.
"It speaks poorly about the willingness of people to travel to New Orleans," he said.
Loveman said an aggressive effort should be made to market the city to convention organizers and make them feel a "moral obligation" to schedule events there. |
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