Harrah’s looks to lead industry in development of racinos

May 27, 2003 3:58 AM

Harrah’s Entertainment Inc. (HET), the company that spent nearly a decade getting its land-based casino in New Orleans straightened out, has entered the "racino" business at Louisiana Downs, the Bossier City racetrack that it purchased for $73.5 million from the DeBartolo heirs.

But opening night at the track’s temporary casino where the company installed 903 video lottery machines was hardly dramatic. In fact, on sight reports indicated there were three slot machines for every customer.

Hardly comparable to the Delta Downs racino opening staged by Boyd Gaming Corp. (BYD) last year. In just its first year of operation, Boyd, using substantial revenues from the slot machines, was able to increase the per day average purses from $40,000 to the current $240,000.

Still Harrah’s officials were not discouraged and noted that they plan to invest $110 million to renovate and expand the track’s gaming facilities. Current payroll includes 742 people. The company will add another 135 positions during the track’s live racing season and another 200 when the new racino facilities are completed.

"The investment we are making in Harrah’s Louisiana Downs demonstrates our desire to be the leader in the emerging racino segment of our industry," remarked Gary Loveman, company president and CEO.

Harrah’s currently operates Bluffs Run Casino and dog track in Council Bluffs, Iowa, and is a partner in the thoroughbred track, Turfway Park, in Kentucky.

When Harrah’s acquired Showboat Inc. several years ago it also inherited a loan, made by Showboat to Rockingham Venture, Inc., that would have permitted Harrah’s to have a 50% share of any slot machine revenue if Rockingham Park were permitted to install slot machines by the New Hampshire legislature. However, that arrangement was terminated nearly two years ago and the Granite State still does not permit racinos.