Professor: Deals will boost casinos’ clout

Michelle Swafford

Thursday, July 15, 2004 | 11:03 a.m.

Harrah's Entertainment Inc.'s proposal to buy Caesars Entertainment Inc. will not likely hurt consumers or employees, industry observers and union officials said today.

But the $9.4 billion proposal could mean increased political clout, which might hurt the public, an industry observer said.

Bill Thompson, a public administration professor at UNLV, said the increased concentration of employees would enhance political power, especially if the MGM MIRAGE and Mandalay Resort Group merger is completed.

"With this concentration of power, they'll be able to win most elections," Thompson said. "The casinos of Nevada should not elect the politicians. The people should."

Thompson said MGM MIRAGE has indicated that it wants all of its employees to register to vote in political elections and all of the major casinos make political contributions. Some casinos send out internal memos recommending which politicians employees should vote for to improve their jobs, he added.

"It's time for our gaming board to tell these companies we'll approve the deals if you agree that you won't have any political activity on site or make political contributions," Thompson said. "That's a New Jersey rule. I think it's time we go to the New Jersey rule."

Although there are some hurdles that must be overcome before the merger can be completed, observers said there are some upsides for consumers and the companies' union.

Thompson said the Culinary Workers Union Local 226 could use the proposed merger as a way to organize hotel-casino employees in Laughlin and Reno, where Harrah's and Caesars have hotel-casinos.

The Culinary union represents about 17,000 employees at Harrah's and Caesars hotel-casinos and says it is supportive of the proposed merger.

"We've have good relationships with both companies and we expect those to continue," said D. Taylor, secretary-treasurer for the Culinary Union Local 226.

He said the union hopes to organize employees outside of Las Vegas and Atlantic City, but that the merger would not make the process any easier.

"I never anticipate that being easier no matter what the matrix is," Taylor said.

Anthony Curtis, publisher of the Las Vegas Advisor consumer newsletter, said most consumers would benefit from the merger because of increased promotions.

"Harrah's is a very aggressive marketing company," Curtis said. "They put a lot of effort into their database marketing. Anyone on those list is going to see some new options."

He added that consumers would not see "gigantic leaps and bounds in price increases."

Harrah's would likely allow each hotel-casino to maintain its own identity and pricing, Curtis said.

"You might see a little bit of price rising, but it will be down the road," he said. "Running at the (high) occupancies they've been running at, you're going to see that anyway, especially at the higher end."