Harrah’s appears pointed toward a Macau casino partnership with Melco PBL, the publicly traded joint venture that already operates Macau casinos and would love a foothold in Las Vegas.
Harrah’s, with its big presence in Las Vegas, would benefit from a presence in what is now being called as "Asia’s answer to Las Vegas."
It’s one of those win-win situations, assuming this still-developing deal reaches reality.
Industry insiders not affiliated with either company but who have recently spent time in Macau say this is how things seem to be shaping up as they also caution nothing is for certain at this point.
"But it makes sense for Harrah’s, and it also makes sense from the Melco perspective," said a another senior gaming executive who has been up close and personal with current Macau dynamics, and recently met with Melco boss Lawrence Ho. "Galaxy (a Hong Kong-based operator of Macau casinos) was apparently considered as a (Harrah’s) partner, but Galaxy has some issues."
The "issues" might impact future licensing efforts in the U.S.
The price of admission to Macau is a big one. Harrah’s is believed to have spent about $3 billion to buy the 175 acres associated with the Macau Orient Golf Club, land that is next to Melco’s proposed Studio City resort project.
Harrah’s is said to have about a year to meet certain performance benchmarks with respect to its new Macau property. For instance, it is uncertain at this point how much of the 175 acres is developable.
"Some of it may be contaminated," confided a non-Harrah’s source. "They have to determine how much of the land can be developed."
None of the principals in this deal-in-the-making were willing to comment, but one insider pointed out that deals with MGM, Wynn and the Venetian are not likely because all three are or will soon be very competitive in Las Vegas and Macau.
MGM will open its Macau casino late this year, but Chairman Terry Lanni has conceded that the Wynn and Venetian properties have created an uneven playing field with their ability to market Macau and Las Vegas casinos to Asian business that is, for the moment, beyond MGM’s easy reach.
It’s been many months since Harrah’s released detailed figures about the performance of its Caesars Palace which has traditionally had strong Asian business.
There’s reason to believe Caesars may have also felt the effects of the same uneven playing field alluded to by Lanni.
Which may explain the decision by Harrah’s to spend close to $3 billion on a golf course. We’ll see.
could be years away
Newspaper headlines have trumpeted Gov. Deval Patrick’s proposal for three Massachusetts casinos as though they might soon be a reality.
But battle-weary resort strategists warn a "been there — done that" approach ”¦ not so fast.
They have been around the business long enough to appreciate the big, big difference between Gov. Patrick proposing three casinos and a majority of the legislature erupting in supportive applause.
Senior Harrah’s VP Jan Jones gave the issue a wry here-we-go-again chuckle. She recognizes that getting a body of lawmakers to approve casinos requires a "process" that sometimes requires years to complete.
The Harrah’s effort to joint venture a Rhode Island casino with a native American group had its supporters, but it also had determined opponents.
Result: There is no Rhode Island casino years after the first proposal was floated.
Pennsylvania finally gave the okay to more than a dozen slot parlors around the state, but what a struggle that was.
The notion of Maryland casinos is no closer to happening than it was several years ago when the new governor first saluted gaming expansion as a great idea.
So how long might it take to get proposed Massachusetts resorts off the ground?
An IGT executive who spoke with the promise of anonymity and the attitude of a campaign-weary cynic suggested, "Take your most conservative guess and then double it. You might be in the ball park."