Despite fiscal problems, Harrah’s seeks to expand holdings

By Steve Green (contact)

Tuesday, June 2, 2009 | 8:40 a.m.

Harrah's Entertainment Inc. is losing money as it labors to service its unwieldy $22 billion debt load -- but that's not stopping the company from looking for ways to expand.

An executive at the Global Gaming Expo Asia in Macau this week said Las Vegas-based Harrah's is interested in expanding in Macau, Taiwan and Japan.

Harrah's, the world's largest gaming operator, would be "interested" in applying for a gambling license in Macau in the event the government ends a freeze on new permits in the Chinese administrative region near Hong Kong, the executive told Bloomberg News.

"As the largest gaming operator in the world, we have an interest in the largest gaming market in the world," Michael Chen, Harrah's Asia president, told Bloomberg.

But Harrah's, which has a golf course in Macau, isn't pursuing acquisition opportunities in Macau that don't come with casino licenses, Chen told Bloomberg.

Bloomberg quoted Chen as saying Las Vegas Sands Corp.'s unwillingness to sell its gaming license in Macau limits the pool of potential buyers of its two shopping malls and condominium complex in Macau to real-estate developers and investors, as casino operators won’t be interested.

Chen also told Reuters that Harrah's is looking at expansion opportunities in Taiwan and Japan.

"Asia remains highly underpenetrated as a market for gaming. There is enormous upside," Chen told Reuters.

In the first quarter, revenue for Harrah's fell 13.3 percent year-over-year to $2.254 billion as the recession reduced activity at its casinos in Las Vegas and other markets. Its loss from continuing operations fell from $275 million in the 2008 quarter to $127.4 million in the 2009 quarter.

Also at the conference, International Game Technology said it is in talks with Las Vegas Sands and Genting's Resorts World to supply slot machines for Singapore's two upcoming casinos.

"We expect the market share (in Singapore) to be higher than Macau," Kurt Quartier, vice-president of IGT's international casino markets, told Reuters.

IGT has a market share of less than 20 percent in Macau, Reuters reported.