LOOKING IN ON: GAMING

Tuesday, Nov. 14, 2006 | 7:35 a.m.

Shares of Harrah's Entertainment rose nearly 14 percent after news that two private equity firms sought to take the company private for $81 per share. More than a month later, Harrah's stock is still trading around $75 per share - well below the company's more recent counteroffer of $85 per share.

That differential illustrates some executives' assertions that casino companies - for all of their impressive gains in recent years and acceptance as more mainstream investments - are underappreciated by the public markets.

While Harrah's is not publicly discussing the offer, executives are quietly negotiating a price that would enrich top executives and shareholders.

Top players include such big shareholders as Chief Executive Gary Loveman, Phil Satre, the ex-chairman and chief executive and the attorney involved in the Harrah's family estate as well as casino executive Claudine Williams, who gave the company a Strip foothold when she sold the former Holiday casino, now the company's namesake property, to Harrah's.

The setting for a recent meeting was not the hallowed halls of company flagship Caesars Palace or a New York hotel room but the well-worn offices of Harrah's Las Vegas, where the company once negotiated the purchase of the Rio hotel and casino from developer Tony Marnell in the late 1990s.

Acquisition talks should advance more smoothly now that Harrah's has wrapped up other transactions that lay in its path, including the purchase of British casino operator London Clubs International, the acquisition of Casino Magic in Biloxi, Miss., and the sale of its hurricane-ravaged casino in Lake Charles, La.

Gaming attorneys say the Harrah's deal will be far from a regulatory slam dunk - especially since the top bosses at bidding firms Apollo Management and Texas Pacific Group are unlikely to welcome intrusive licensing investigations.

The two sides in the deal are linked by well-connected gaming lawyer Frank Schreck. He has helped private equity investors buy into casinos, represents Apollo and Texas Pacific on this deal and represents Harrah's in gaming regulatory matters.

If you've had your fill of Texas hold 'em tournaments, maybe you're ready for the Ultimate Blackjack Tour.

The blackjack tour, created to capitalize on the popularity of televised poker and resembling the World Poker Tour in style and appearance, made the jump from fringe experiment to broadcast reality in September when the first season aired on CBS. The show has proved worthy enough for two Las Vegas casinos, the Palms and an as-yet-unnamed Strip property, to host the show in the coming months along with a growing number of stops at other casinos around the world. Both Las Vegas properties will hold periodic satellite tournaments to determine players for a championship to be filmed at the properties next year.

The program's core audience is 21- to 44-year-olds, who are younger than typical casino customers, blackjack tour General Manager Larry Kopald said. They include lots of potential gamblers - people who are logging on to the show's Web site to play free blackjack - and a big percentage are women, who tend to play blackjack more than poker, he said.

The show is reaching more than 1 million households - representing about 2 percent of TV viewers at that hour. That's a decent showing for a new program and especially good during the midday slot before Saturday college football games, Kopald said.

"Women play more games online than men do - mostly fun stuff like Tetris," he said. "They are starting to nibble here and it looks as if we are expanding the market of people who are watching these shows on TV."