Given the recent freeze-out on new casino operators in Macao, executives at Harrah’s Entertainment might as well be sporting T-shirts that read, “I spent $577.7 million in Macao and all I got was this lousy golf course.” And, in light of Harrah’s considerable debt load, CEO Gary Loveman will have the unenviable task of advising tight-fisted co-owners TPG and Apollo Management what to do next with their expensive piece of Chinese real estate.

They could gamble on hunkering down for a few years, taking a low near-term return while waiting for Macao supremo Edmund Ho’s successor to possibly liberalize the enclave’s gaming regime, admitting new corporate players. Or Loveman could try to peddle it around -- probably at a loss, seeing as the land can’t be rezoned for gambling and he’s dealing from a position of weakness.

(A third option, whereby Harrah’s acts as a passive hotel operator as part of a joint venture in which Wynn Resorts or MGM Mirage owns the casino just seems too transparent and disingenuous to get past the current regime, IMO. It’d be obvious a subversion of the “three-plus-three” arrangement, turning it into 3 + 3.5.)

The fate of the golf course is a pressing question only because Harrah’s latest “Consolidated Summary of Operations” contains some scary-looking numbers. When 1Q08 is compared to 1Q07, interest expense has increased threefold (from $185.8 million to $557.6 million). Pile on $211.3 million in early retirement of debt – to reduce those interest payments – and an 11% decline in income from operations and it’s quite a jolt to the balance sheet. In the 1/28/08-3/31/08 period, combined income of $445.5 million was negated (and them some) by $679.2 million in interest expense and early debt retirement.

Then there’s the matter of the shuffling of properties betwe