Imperial Palace falls to Harrahs; Biloxi property spurned - Friday 12th of August 2005

Confirming rumors that swirled up and down the Strip last week, Harrahs Entertainment announced Monday that it had acquired the Imperial Palace Las Vegas, in a deal valued at $370 million. The Imperial Palace in Biloxi, Mississippi was not included in the transaction and remains in the hands of the Ralph & Betty Engelstad Trust.

The purchase gives Harrahs an additional 2,640 hotel rooms along the Strip, plus 1,600 slots, 56 table games and a drive-up race-and-sports book. Most importantly, perhaps, Harrahs obtains 18.5 acres of central-Strip real estate. "That was the attraction," said Harrahs spokesman David Strow. "It was a tremendously strategic location."

"So thats strategic for them in that they now control that whole area," said Los Angeles-based analyst Saul F. Leonard, referring to the Flamingo and Harrahs Las Vegas hotel-casinos that flank the Imperial Palace.

"Harrahs is putting together some very, very strategic real estate," confirmed Eugene Christiansen, president of New Yorks Christiansen Capital Advisers. "You look at that, you look at Caesars Palace and the implication is that Harrahs is: a) Making a no-brainer investment; b) Is making provision for a major expansion in its Strip presence. I look at the map; I couldnt read it any other way. Thats something the company needs Š a greater presence on the Strip."

However, given the amount of capital recently plowed into Caesars Palace (including the brand-new Augustus Tower) and the Forum Shops, Christiansen doesnt think that if Harrahs is going to make a major statement on the Strip that theyre going to do it on the west side. He added, "There was a defensive element here, in that would not have been in Harrahs interest for anyone else to get control of the dirt that Imperial Palace sits on. I have no private indication from the company that this is true, but thats the way I read it."

Because of the narrowness of the parcel on which the Imperial Palace resides, Leonard believes its likelier that Harrahs will expand its eponymous Strip property and/or the Flamingo rather than try to build a stand-alone facility in place of the Imperial Palace.

"Theyve also put, in the last 10 years, 400-odd million into their own Strip property," Christiansen noted of recent improvements to Harrahs Las Vegas. "So itll take a while to amortize those investments, if thats what the company wants to do. On the other hand, when Steve (Wynn) bought the Desert Inn, in the few years preceding it had a $375 million makeover, and Steve just decided to dynamite it and start over."

The Imperial Palace is undergoing its own, $130 million makeover, which came as news to Strow, who added, "I think that will not be proceeding." Imperial Palace spokesman Jeremy Handel said, however, "My understanding is its going to be business as usual (until the deal closes)."

After that, both the Las Vegas and Biloxi Imperial Palaces will operate under the IP brand in the near term.

"We will not be pursuing that brand in the long term," Strow remarked. Although Harrahs has acquired rights to the brand, it is unclear whether the Biloxi casino-hotel will continue to use the name or not.

Other news from around the same time

Bets are off for 888 - Friday 12th of August 2005

Will 888.com be as sure a bet for punters as PartyGaming? Backing the latters June flotation has cer....


No decision on casinos evacuations - Friday 12th of August 2005

Larry Gregory, the executive director of the Mississippi Gaming Commission, said at 5:30 p.m. Saturd....


Casino explosion nearly forgotten - Friday 12th of August 2005

There are no plaques outside Harveys Lake Tahoe Resort & Casino to commemorate the shocking event th....


Sex accused: Its a payback - Friday 12th of August 2005

FORMER WA police officer accused of luring a young Thai girl from her poor family and holding her a....


Casino backers disclose details - Friday 12th of August 2005

The proponents of a resort with two casinos have disclosed more details of agreements they say they ....


Bookie unhorsed by too much of a racing certainty - Friday 12th of August 2005

Ladbrokes managers were once again extolling the virtues of virtual horse racing at Hilton Groups an....


Two casino boat owners charged with tax fraud - Friday 12th of August 2005

A married couple who oversaw Star Dancer casino boat operations in Little River and Florida were ind....


Aztar may have missed opportunity - Friday 12th of August 2005

With all of the recent buzz about Harrahs Entertainment Inc.s plans for future redevelopment project....


Genting first-half net profit increases 11pc - Friday 12th of August 2005

GENTING Bhd, which operates a casino, hotels and power plants, said first-half net profit rose 11 pe....


PartyGaming holds a strong hand for the long haul - Friday 12th of August 2005

The founders of poker websitedealt themselves a Royal Flush when they floated their company on the L....