Bargain-hunting at Harrah’s

But not in the way you might think …

Harrah’s Entertainment is $557 million richer — which effectively amortizes the Planet Hollywood deal — after the swap of a 16% ownership stake to three investment firms for $1.2 billion in debt. In addition to covering his Planet Ho outlay, CEO Gary Loveman offloads more debt at 67 cents on the dollar (in Paulson & Co.’s  case, anyway), and finds himself sitting atop $3 billion in cash and credit. Also benefiting was Paulson, which obtained a 10% slice of Harrah’s, continuing a buying spree in which it has taken large positions in MGM Mirage and Boyd Gaming.

The only downside is that another “goodwill” writedown seems to be looming on the horizon. If $1.2 billion in debt equals a 15.6% share of Harrah’s, what does that imply about the total value of a company that went private for nearly $31 billion two years ago? Let’s pass the hat, offer $5 billion (and change) for the other five-sixths of Harrah’s and see what answer we get.

Trop struggling. It’s disheartening to see Alex Yemenidjian and his lieutenants doing almost all the right things at the Tropicana Las Vegas, only to be rewarded with a 44% revenue decline for 1Q10. Predecessor Tropicana Entertainment didn’t do jack to promote or improve the place and still posted higher revenues. Given that Onex Corp.’s rolling renovation of the property has meant taking 25% of the hotel rooms offline and considerably disrupted the casino floor, I can accept management’s explanation that it accounts for the 34% room-revenue plunge (that, and a saturated market) and perhaps for the 35% fall in gambling dollars. As for the shocking 53% declivity in F&B revs, even after the makeover, the Trop’s restaurant offerings are few and pretty “blah” at that. At least the buffet is gone, never to return. Gawd, that thing was terrible.

Years of living dangerously. Those who forget history are doomed to repeat it — like the Seminole Tribe. Having caught several high-ranking Seminoles with their fingers in the till, the National Indian Gaming Commission is contemplating penalties. The commission could do what neither legislators, gambling opponents nor private-sector racinos could: force the closing of two Seminole-owned casinos. Given the extent of the Seminoles’ expansionist tendencies, including that of the Hard Rock brand, this is a heckuva time to be nabbed with one’s hand in the cookie jar.

Exiled to OK City. It looks like at least some of Columbia Sussex‘s casino bosses are being purged or are fleeing from Carl Icahn‘s takeover of Tropicana Entertainment. Former River Palms/Tropicana Express Laughlin GM Tom Russell has relocated to an Oklahoma City outpost of the ColSux empire. Russell may be out of the casino biz but he’s also out of Laughlin, too, so he’s definitely “trading up,” way up.