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 Harrah's is set to take over gaming operations of the Planet Hollywood Resort in Las Vegas later this month if they can get approval for the deal from the state Gaming Commission. The chances are very good that there will be no opposition.
Many casinos in Las Vegas have been suffering since the start of the latest recession. Business has been down over all and for some of the casinos the results have been quite devastating.
While things have been showing some definite signs of improvement in the last few months it has been a case of too little too late for some companies.
"The existing Planet Hollywood was headed for some type of restructuring, perhaps a bankruptcy," said Gaming Control Board Chairman Dennis Neilander recently. He thinks that the deal will be good overall for Las Vegas, "We have some 40 properties that are in our bankruptcy group right now. This will offer a smooth transition for employees that are there and operating the business."
In September and December, Harrah's spent a reported $70 million acquisitioning an enormous $306 million of Planet Hollywood Resort's debt at a discounted price. It is this debt that they are willing to exchange with the current owners for a 100% stake in the company.
Harrah's plans to keep on over 95% of the original staff when they make the transition and plans to spend approximately $8 million integrating the company's information technology systems into the resort. The cost is minor though when it comes to what Harrah's will be getting out of the deal.
For starters with the new property they will now have control of all 126 acres on the Strip between Flamingo Road and Harmon Avenue adding to their amazing portfolio of Caesars Palace, Flamingo, Harrah's Las Vegas, Harrah's Paris Las Vegas , Imperial Palace, Bill's, Bally's and the Rio. "We began to (buy the debt) because we felt Planet Hollywood would be a very complementary addition to our portfolio in Las Vegas," said Harrah's Chief Financial Officer Jonathan Halkyard.
The new licensing agreement will also provide the company with certain branding rights. If the new deal goes according to plan they will be allowed to start new casinos with the Planet Hollywood name internationally.
The Gaming Commission is scheduled to make an official decision on the deal February 18th and Harrah's is ready to take over operations as soon as February 19th at noon.
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