Harrah’s sees racinos as next big boom

Feb 11, 2003 8:02 AM

Harrah’s Entertainment isn’t horsing around. It’s getting serious about racinos.

"We’re confident we can get a significant return [and] drive customers to the track at far less cost," CEO Gary Loveman says of his company’s Louisiana Downs.

Analysts say that revenue model will be parlayed at other properties ”” and Harrah’s plans on leading the pack.

Owner of shares of four U.S. racetracks, Harrah’s is focusing on developing its racino business.

"Our recent acquisition of Louisiana Downs is a sign of our intent to be a leader in racinos, which are expected to be one of the fastest growing segments of the gaming industry,’’ Loveman said.

Harrah’s expects to have 900 slots installed at the track near Bossier City, La., this summer. It paid $73 million for the property.

The company is also part owner of Turfway Park in Northern Kentucky and full owner and operator of a greyhound racino in Council Bluffs, Iowa, as well as Bluegrass Downs in Paducah, Ky.

Now said to be eyeing Suffolk Downs outside Boston, Harrah’s is making a smart bet, according to Ron Barbaro, chairman and CEO of the Ontario Lottery & Gaming Corp.

"For one-tenth the cost of Bellagio, we outfitted all 15 our tracks [with slots] and generate $20 million a week of gross profit,’’ he said.

Harrah’s recently requested a tour of Ontario’s facilities.

The Boyd Group, meantime, is reportedly on the same track. The company is reportedly in negotiations with track magnate George Carney for the Raynham-Taunton racetrack in New Jersey.

"There’s really no demand for the resort model,’’ says American Gaming Association President Frank Fahrenkopf. "The [pari-mutuel] track interests are powerful, and they see slots at their tracks as a way to revitalize their aging tracks.’’