Loveman loves him some Macao

By now the saga of Harrah’s Entertainment‘s Macanese golf course is the stuff of legend: a $578 million golden albatross around the company’s neck and a metaphor for the company’s misfortune-prone international strategy. While some of CEO Gary Loveman‘s ventures overseas have fallen victim to the corporate equivalent of ADD, he’s not given up on Macao. With so much invested, does he have any choice but to keep his eye on the ball?

Loveman tells Bloomberg he’d like a piece of the Macanese action. Begging the obvious question (“Who doesn’t?”), the more relevant query is one that the six existing operators are likely to pose Loveman: What’s in it for me? It’s all well and good to “like to see the Caesars Palace brand in Macao,” but how is that to be accomplished?

The extant casino operators, with the exception of Steve Wynn, need one or both of the following: cash and/or a fungible brand name. Harrah’s definitely owns brand equity, especially in the form of Caesars. That could make a deal attractive to brand-challenged Galaxy Entertainment Group and it also might amuse Stanley Ho (back in the public eye) to add the most famous name in gambling to his vast stable of casinos. In return, Harrah’s just maybe gets what you might call a sub-subconcession. (It also sounds as though Loveman wants Macao Chief Executive Fernando Chui to lift the ban on casino redevelopment of Harrah’s famous links, but an exception like that would have at least five concession operators screaming bloody murder.)

Casino equity in Macao is hard to come by and MGM Mirage certainly isn’t going to cut any deal that reduces its 50% stake over there. Theoretically, the lion house could lease the Caesars escutcheon but the unlikelihood is obvious and MGM has made it clear it has other brands it plans to extend into the Pacific Rim. Sheldon Adelson desperately needs dollars — although he’s projecting 20% ROI in Singapore — but Harrah’s has few to spare. Perhaps Leon Black could purchase a percentage of Las Vegas Sands (which would raise antitrust issues stateside), Galaxy or Melco Crown Entertainment and rent the Caesars name to himself. Possibly the IPO to which Loveman refers in passing would be an offering on the Hong Kong bourse — per Wynn’s, SJM‘s and Adelson’s examples — thereby giving Harrah’s some cash to flaunt before money-starved developers.

And what’s up with that IPO talk? Or perhaps the question is, What was the point of taking Harrah’s private and hamstringing it with debt? When Black and his cohorts closed on HET, it was going for $90/share. Lotsa luck getting anything close to that in an IPO offering today. Harrah’s also has its work cut out for it if and when that Planet Hollywood deal closes: Recent J.P. Morgan surveys find Planet Ho’s ADRs in a fearsome downward spiral.

Atlantic City Death Watch: The disastrous foray of Colony Capital into the casino industry continues to unravel, as Credit Suisse takes the keys to Resorts Atlantic City. Colony is also in deep fertilizer at its Atlantic City Hilton, having borrowed more than $700 million against the two properties (far more than they were worth on the open market).

Since Resorts and Hilton are now competing against one another, it’s a bit of a surprise that New Jersey regulators allowed Resorts CEO Nick Ribis to both remain at his post and retain percentages of both casinos. If regulators don’t care about this obvious conflict of interest, maybe Credit Suisse should. Besides, the New Jersey Casino Control Commission is too busy tripping over its own shoelaces.

Gordian Knot cut. After some waffling, the Anne Arundel County Council finally did the right thing and voted to approve a Cordish Gaming casino for Arundel Mills mall. Luckily for the council, the state had given it at least a fig leaf’s worth of cover by voting to approve Cordish as a slot operator a fortnight earlier. Special S&G kudos go to Councilman James Benoit, who — despite his personal opposition to gambling — voted for Cordish. His sense of fair play was affronted by a proposal that would have authorized slots for Anne Arundel but redlined Cordish out of the deal.

A raspberry is blown to sore loser Laurel Park, which is going to try and queer the pitch for Cordish at the ballot box. If Laurel Park wanted slots that badly, maybe it should have ponied up the mandatory license fee when it asked the state for a racino permit. (Not assuming it’s home and dry, Cordish has also made a play for the track.)

Resumé inflation. It seems to be contagious within MGM Mirage. ‘Nuff said.