Harrah's Completes Mega-Merger With Caesars - Sunday 12th of June 2005

Harrah's Entertainment buy-out of Caesars Entertainment officially closed Monday. Harrah's is once again the world's largest gaming company. The deal is worth a total of $9 billion.

It's been 11 months since Harrah's announced they wanted to buy Caesars Entertainment. Now Harrah's has nearly 100,000 employees and enormous clout in the gaming industry. It's a focused company that always has a plan. As the company moves forward from the buy-out that plan will unfold quickly.

Acquiring Caesars Palace gives Harrah's a high-end hotel in Las Vegas. It's something that the profitable gaming company never had in this area. The addition of Caesars Palace will not change the underlying strategy of Harrah's. Senior Vice President Jan Jones says the company will still focus on reaching out to customers and offering them a product that meets their interests. The addition of Caesars just adds choices.

Jones says, "A customer who is in and looking for a very high end entertainment experience. They can go to Caesars. If they are looking for a more gaming centric experience, Harrah's is great."

UNLV Director of the Center for Gaming Research Dave Schwartz studies gaming companies and the history of gaming. He says Harrah's has captured the mid-level market. He believes the company's customer tracking program is at the core of their enormous profits. Transitioning to a high-end customer may be difficult, but Schwartz believes it's now a must.

Schwartz says, "There is certainly a lot of volatility in the high-end market. If you are the biggest gaming company on the planet, you need to cater to the high-end market and I think they will."

Schwartz expects, as Harrah's runs Caesars Palace, the company will take a more high-profile philanthropic position in Las Vegas. That is an aspect of Harrah's that the Nevada Gaming Control Board criticized. Schwartz adds, "There is definitely an expectation and I think they will make strides towards meeting those expectations."

The new company holds a 25-percent market share on the Strip. They went from one casino on the Las Vegas Boulevard, Harrah's, to five and the Rio just off the Las Vegas strip. That is a huge presence in the middle part of the Las Vegas Strip. 

The Gaming Control Board and Nevada Gaming Commission want the company to give back to Las Vegas related to its size and presence.

One of the first major changes you may see on the Las Vegas Strip will be a change at Bally's. Harrah's will take the Bally's name off the casino. At this point there are no plans for what they want to put there. Experts say it's a good location for the Horseshoe brand name. Harrah's bought that from Binion's.

No final decision has been made.

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