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Jack hits the jackpot!

Sep 16, 2003 9:47 AM

Gambling giant Harrah’s Entertainment Inc. has cut a deal to buy Jack Binion’s Horseshoe Gaming Holding Co., broadening its hold over regional gambling markets in the South and Midwest.

Harrah’s is expected to pay $917 million, plus the assumption of $533 million in debt, for the closely-held Horseshoe conglomerate.

Sources close to Jack Binion say he is exhilarated at the prospect of selling his casino holdings.

The sale is subject to the satisfaction of certain conditions, including receipt of necessary regulatory approvals, and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Act.

No financing needs to be arranged to complete the deal.

The purchase will give Harrah’s control of several successful regional casinos, helping cement its gambling empire with three new properties in Louisiana, Mississippi and northern Indiana.

Most attractive to Harrah’s, though, is the Horseshoe brand itself, according to people familiar with the company’s strategy.

Harrah’s intends to build or convert more casinos to Horseshoes, which, though few in number, have come to dominate each of their geographical markets.

In a separate but related transaction, Harrah’s is negotiating to sell its Harrah’s Shreveport casino to Los Angeles-based Colony Capital LLC. No deal has yet been struck on that property, according to casino analysts.

But, because Harrah’s already owns the Louisiana Downs racetrack in the region, the addition of the nearby Horseshoe casino in Bossier City, could spark antitrust concerns among gambling regulators, the company has been advised. Selling the Shreveport casino is expected to allay such concerns.

Harrah’s move to increase its holdings is expected to put the company in a dominant position in regional gambling in the U.S. Harrah’s currently draws customers to regional casinos across the South, Midwest and in Atlantic City, N.J., as well as in Nevada. It owns the Harrah’s, Rio, Showboat and Harvey’s casino brands.

Jack Binion’s Horseshoe Casino & Hotels in Bossier City, La., Tunica, Miss., and Hammond, Ind., are popular destinations with a reputation for high-stakes betting.