Harrah’s preparing for British invasion?

Jun 17, 2003 8:20 AM

As top American casino companies eye the United Kingdom as the next biggest gaming ”˜, Harrah’s Entertainment is staying mum about a report in a major English newspaper last week that the Las Vegas firm is in the final stages of a casino development pact with the U.K.’s largest gaming company.

In two stories last week, the Financial Times of London reported that Great Britain’s top operator of casinos and bingo halls, the Gala Group Ltd., was "in advance talks" and has had "detailed discussions during the last few months" with Harrah’s, with an announcement of a casino development deal expected "in the next couple weeks."

The deal would reportedly involve Harrah’s and Gala Group going in halves on a plan to begin building a chain of Las Vegas-style casinos across Britain, once the British Parliament approves reforms that would loosen that county’s strict restrictions on the locations of casinos and customer access to casino gaming, as many expect it to do next year.

The newspaper said Harrah’s and the Gala Group’s joint venture would likely "involve investing several hundred million pounds in casinos across the U.K."

Harrah’s Entertainment spokesman Dave Strow said the company would have nothing to say about the Financial Times reports.

"We don’t comment on rumors or speculation," Strow told GamingToday. "I’ve seen the story. These come up periodically."

Should Harrah’s link up with the Gala Group, it would be a much bigger deal for the company than MGM Mirage’s agreement — announced last month — to purchase 25 percent of Metro Casinos, a U.K. firm building a casino in Bristol, about 50 miles outside London.

Gala Group operates 166 bingo parlors and 28 casinos in the U.K., the Isle of Man and Gibraltar. Its bingo and casino clubs boast of five million members. Also, Gala Group’s Internet casino division is said to have one million members.

Furthermore, as American casino firms are increasingly interested in the future of downloadable slots — whereby a computer server may change the software in hundreds of gaming machines at once — Harrah’s could make major headway in that market. Gala Group is currently the largest operator of downloadable slots in Europe.

In December 2000, Gala Group’s former owners, including then-majority shareholder Credit Suisse First Boston Private Equity, bought the Ladbrook casino chain in England. Then this year, Credit Suisse equity sold Gala Group to the private equity groups Candover and Cinven, for more than $2 billion.

Meanwhile, the British Parliament is expected to begin considering laws to relax its gaming regulations -- which for instance requires new casino patrons to wait 24 hours before entering — in September, with possible adoption foreseen early next year.