Biloxi Off Harrah’s Short List
Plans for a $1 billion resort-casino complex on the Mississippi Gulf Coast near Biloxi have been delayed by Harrah’s Entertainment, the second such postponement by the resort and gaming corporation since receiving a $15.5 billion acquisition offer from two private equity firms.
High construction costs and the “volatility of the marketplace” were cited by execs during a conference call with industry analysts as contributing factors to the postponement of the Biloxi development, the Wall Street Journal reported. Harrah’s also announced it wouldn’t bid for a multibillion resort-casino project in Singapore as expected.
Both decisions come in the wake of the disclosure in mid-October of an effort by private equity firms Apollo Management LP and Texas Pacific Group to acquire Harrah’s.
A person familiar with the company’s position told the Journal that the Biloxi development became a lower priority for the company after its Atlantic City, N.J., property endured a rough third quarter.
Harrah’s is reportedly now focusing on the Atlantic City and Las Vegas properties, including the recent acquisition of 350 acres on and around the Vegas Strip.
Otherwise, things appear to be business as usual for Harrah’s. The company upped its bid to $570 million for British casino operator London Clubs International PLC, according to the WSJ, and spent more than $8 million on a Rhode Island ballot initiative to permit Indian gaming in West Warwick.
Harrah’s, the world’s largest casino operator, also has planned projects in the Bahamas, Spain and Slovenia.
While Biloxi appears to be on the back burner, Harrah’s spokesman Alberto Lopez told the Journal the company “has acquired quite a large footprint” in Biloxi and still plans to “build something spectacular.”
It appears that it’s going to take a spectacular return of the tourist trade to the troubled region before that will happen, however. While several casinos did reopen after Katrina, with the help of new legislation permitting them to be built on land rather than over the water on barges, the gambling industry’s full recovery still very much depends on tourism.