Harrahs: American Voters Not So Quick to Embrace New Casinos

U.S. voters may not be so quick to allow further expansion of the casino industry, based on a election result in Rhode Island last week, the CFO of Harrah's Entertainment Inc.said on Monday.

Rhode Island voters rejected a constitutional amendment that would have allowed an Indian tribe to build a casino in a partnership with Harrah's.

'I think it is going to be very difficult for new gaming to become available in these states on terms where we and our shareholders can make an adequate return,' said CFO Jonathan Halkyard.

He said Harrah's, which had hoped to operate a casino in Rhode Island for the Narragansett Indian Tribe, spent $15 million on the campaign.

Rhode Island Gov. Donald Carcieri had expressed concerns that the new casino would draw business away from the state's two existing gambling facilities, which pay the state 60% of their gaming income.

'When you compare some of these opportunities with Las Vegas, Atlantic City, or Biloxi (Mississippi) it's just not worth it,' the Harrah's CFO said.

Also last week, Ohio voters turned down an amendment allowing slot machines at seven race tracks and two off-track Cleveland sites.

Halkyard, arguing that the casino industry has a strong record of creating jobs and economic opportunity, said new opposition may be the result of increased competition between gambling operators as well as the fact that most Americans now live within driving distance of a casino.

The CFO said Harrah's, which has formed a special committee to review a $15 billion takeover offer from two private equity firms, expects to unveil plans for redevelopment of its Las Vegas Strip properties early next year.