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 Posted by gehrig on 27 January 2004, at 12:04 a.m., in response to Re: harrah's is the new owner., posted by Jimmy S on 26 January 2004, at 3:41 p.m.
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few things first, mostly regulatory and bean counting.

 

usually it takes at least 6 months for nevada gaming to approve a license for even an existing property. while harrah's currently holds a nevada gaming license, individual "key" employees must have rigorous background checks. "key" employee status may apply to anyone on the premises as determined by nevada gaming, not just the obvious "management". the license "may" be temporarily transferred, at the discretion of the chairman of the nevada gaming commission, pending the outcome of the investigations.

 

other issues are the payment of "approved" accounts payable. obviously if the many vendors can't get the past due bills paid, they might be reticent about supplying the same joint, even with a replacement operator.

 

then there is the matter of employees, unionized and otherwise. typically, harrah's will interview all former horseshoe employees. at this juncture, the change of ownership, harrah's *may* have the legal ability to re-open the union contract. and obviously the union would be on shaky ground automatically denying some downward adjustment. it's obvious that the union wage package at least contributed in some part to the 'shoe's failure. though they have openly stated that they will give preference to former 'shoe employees, it is intuitively obvious that they can't rehire all. same reason is that they can't operate the joint exactly as before. with all the same/previous employees and same business plan, they could expect the same results as those which permitted them to "steal" the property. while the full terms haven't been (and, may never be) disclosed, the sale appears to me to be "cheap"... kinda like buying some guy's house for past due taxes.

 

remember when the losing, desert inn was bought by wynn ? the property was "available" for several years. the potential buyers were apparently only focusing on the p&l of the d.i. from gaming operations. wynn bought the real estate, not a stumbling/usta was casino.

 

when the other potential buyers came out of their stupor, they realized he had bought the last, huge, contiguous acreage of las vegas strip property... which now seems to sell at most of 10 million an acre.... as noted by the recent, "historical"/cheapie motels farther south...actual sales and refused/hold-out offers.

 

time will tell what harrah's will do. were i they, i'd freshen up the joint, strip the value/name/quality employees and sell it to some dude with pockets that drag on the ground. or at least, to some slot route operator (already licensed) as the pending deal for the gaughan properties.


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