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Harrah’s may purchase Showboat

Sally J. Taylor

If an agreement is approved for the purchase of Showboat casinos by Harrah’s Entertainment, Inc., the position of Harrah’s Lake Tahoe as a gaming resort could get a boost upward, according to corporate officials.

The $519 million acquisition agreement, announced Friday and expected to be completed in the second quarter of 1998, would make Harrah’s the world’s largest gaming company.

With a similar target customer – the avid gamer who plays at casinos in multiple markets – the purchase of Showboat is expected to increase the customer base at all Harrah’s properties.

“(The acquisition) is really exciting for the company in a lot of ways,” said John Packer, director of communications for Harrah’s Lake Tahoe. “It creates more shareholder value and fits into our growth strategy. …

“When it plays out, Harrah’s Lake Tahoe will be in a position to capitalize on the database (of customers), to invite more players not only to game, but to experience Lake Tahoe.”

Harrah’s in “Lake Tahoe and Las Vegas, as the true resort markets in Nevada, would have access to a lot more customers,” said Ralph Berry, vice president of communications and public affairs for the corporate offices.

Harrah’s currently encourages brand loyalty through its Total Gold program in which customers can earn and use rewards at all of its properties. Showboat’s casinos in Atlantic City, Las Vegas, and majority-owned casinos in Sydney, Australia and East Chicago, Indiana, will be added to the program.

“Our strategy is to use distribution, technology, customer service and marketing to become the first choice casino company for our target players,” said Philip G. Satre, Harrah’s chairman, president and chief executive officer. “The purchase of Showboat is a perfect fit for our strategy. Showboat gives us additional distribution and an expanded customer base in key growth and feeder markets.”

Because the Las Vegas Showboat property is located away from the Strip and caters to local clients, Harrah’s officials will take a close look at whether or not to hang onto the property.

Harrah’s acquisition of Showboat, expected to produce savings by consolidation of duplicate corporate departments, is not expected to impact front line Harrah’s employees.

“Field or property-level employees will stay relatively the same, certainly for Harrah’s,” Packer said.

Because such offices as payroll and risk management are centralized at Harrah’s but each Showboat property has separate departments, elimination of duplicate offices could impact some people in the top echelons of the corporation, he said.

Showboat’s president and chief executive officer J. Kell Houssels, III, will join Harrah’s as the president of Harrah’s Showboat division. Other Showboat executives will also be incorporated into Harrah’s as division executives.


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