Harrah's Casino Possible Close Out in Asia

5 years ago, the casino corporation that is now Harrah's Entertainment Inc. decided not to bid for a gambling license in the booming Chinese enclave of Macau while its competitors pushed in their chips.

Now, the world's top casino operator faces the prospect of being shut out of Asia regarded as the world's most dynamic gambling market after losing its bid last week to build a new resort in Singapore's Marina Bay.

Wall Street hailed bid winner Las Vegas Sands Corp., a company that earned credibility in the Far East by becoming the first North American casino company to open shop in Macau in May 2004. Las Vegas Sands now boasts nearly double the market capitalization of Harrah's, around $25 billion, primarily because of its Asian growth prospects.

Jefferies & Company analyst Lawrence Klatzkin increased his target for Sands' shares by $8 to $88.25 after the Singapore license win. Sands now trades around $70.

Meanwhile, Harrah's is playing a game of catch-up in a region in which its Las Vegas-based competitors, Sands, MGM Mirage Inc. and Wynn Resorts Ltd., are plowing billions of dollars and counting on rich returns.

"It's a concern," said Harrah's spokesman Alberto Lopez. "It's an area of concentration. It's an area where we know that we need to move forward deftly, if you will."

Analyst Dennis Forst of Keybanc Capital Markets said the loss puts Harrah's in a difficult position.

"It is a hole in their portfolio and something that they are probably spending a lot of time analyzing how to get into both Macau and other places in the Far East," Forst said. "It puts them obviously at a disadvantage in that part of the world."

Wynn's $1.1 billion Wynn Macau resort is set to open Sept. 5, followed by a second Sands project, the $1.8 billion The Venetian Macao next year. Also, an MGM-Pansy Ho joint venture, the MGM Grand Macau, costing about $975 million, is scheduled to be completed late next year, while others are in the works.

June 6, 2006
Posted By Larry Rutherford
Staff Editor, CasinoGamblingWeb.com    Previous Page | Internet Gambling | Top Online Casinos | Submit News!

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