06/16/2005 11:00PM

Caesars deal brings large flock of high rollers into Harrah's fold


Harrah's Entertainment officially became the largest gaming company in the world at the Nevada Gaming Commission meeting on June 10. With the final hurdle out of the way, Harrah's engulfed Caesars Entertainment in a $9 billion purchase and folded that gaming giant into the Harrah's portfolio by Monday morning.

The new gaming conglomerate will operate more than 40 properties in a dozen states employing 95,000, with annual revenues of more than $8.5 billion. In Nevada, a payroll of $1.5 billion employs 40,000 at six casinos, including the Strip properties of Harrah's Las Vegas, Bally's, Paris Las Vegas, the Flamingo, and Caesars Palace. It also calls the Rio, just off the Strip, part of the family.

By comparison, MGM Mirage, which closed its purchase of the Mandalay Resort Group in April, controls a dozen of the Strip's 42 properties and 49 percent of its hotel rooms.

Unlike the MGM Mirage consumption of Mandalay Resort properties, however, Harrah's has positioned itself in a new arena of clientele. Whether it is a fair assessment or not, Harrah's is viewed as attracting a slot-machine type of crowd compared with the high rollers who frequent the MGM Mirage consortium. Purchasing such an icon as Caesars Palace puts Harrah's in the high-roller game now.

As the takeover takes hold, those in the industry, and more specifically the workers and Caesars Palace regulars, are waiting to see what handprint Harrah's puts on its prize acquisition.

Jay Sarno developed and built Caesars Palace in 1966. Now, Caesars survives on its opulent reputation, and an expansion under its previous ownership has reinvented the brand icon and brought it back to a level of competition with the Strip's newest megaresorts.

But, the measure of Caesars Palace has always been its caliber of loyal clientele, and the numbers that accompany them. Now, Harrah's is at a crossroads and Caesars Palace is its vehicle.

The loyalty of high rollers at Caesars is unparalleled. Many explored other Las Vegas resorts only to remain a Caesars guest since it opened almost 40 years ago. The Harrah's purchase has not escaped their concern. Many will continue their loyalty to Caesars and give Harrah's the benefit of the doubt - for a while.

Most who have been at Caesars through the purchase process know that many high rollers are exploring their options. Unlike the majority of the 30-million-plus annual visitors to Las Vegas, high rollers have many luxury megaresorts waiting for their business. It is no surprise that the recent opening of Wynn Las Vegas had an extensive invitation list of well-heeled guests that included many of Caesars' high rollers. It also comes as no surprise that Wynn hired many key hosts from there as well. Good business, to say the least.

The challenge for Harrah's seems obvious. Don't mess with the Caesars brand, or its brand of hospitality for loyal high rollers. It's the people, not the bricks and mortar, that make Caesars special.

Caesars loyalists should take the new landlord in stride, however. Harrah's didn't become a gaming behemoth by making miscues. Remember, it purchased the Horseshoe Gaming Holding Corp. for its World Series of Poker and its Horseshoe brand. Those assets found a responsible custodian.

Although the World Series of Poker has changed venues to the Rio, it is breaking all records for attendance, handle, exposure, and popularity. It's a shining example of an intuitive company maximizing a valuable brand.

This should be settling to the loyal Caesars customers and comforting to the first lady of Las Vegas megaresorts.