Thursday, February 25, 2010


The Financial Times has a frightening piece online indicating that Texas Pacific Group, one of the private equity firms that own Harrah's Entertainment, has been buying up the debt of the Palms. The piece relies on anonymous sources, albeit more than one, and notes that "the investment points toward a systematic strategy by Harrah’s to acquire other casinos through their distressed debt."

You know, like how Harrah's just took over Planet Hollywood. Cue scary music.

The report indicates that the Palms is taking a massive hit from the recession and that "the Palms Place condo-hotel launched in 2008 is a poster child for the recent wave of overambitious casino projects as it had only leased one-third of its condo-hotel units by late 2009."

And this:

"Harrah’s might take a more utilitarian approach with Palms and Planet Hollywood, by toning down some of the glitz and boosting appeal to middle market customers. Then the idea would be to feed those customers to other properties in the Harrah’s portfolio."

Now, I'm no Harrah's basher. They do what they do quite well. But come on, Mr. Loveman, not the Palms. No. Please no. It is a special, unique entity operated by a rare owner-operator (George Maloof) who does not have any evident ambition to take over Asia or Pennsylvania or the Republican Party. He just wants to make his one place a cool, fun place to be. That's all. Is that so wrong?

I've got a call in to George Maloof. I'm hoping he can clarify. A top Harrah's executive source of mine said he/she hasn't heard anything at all and this was one of the first to know about the Planet Hollywood deal. So who knows. But the whole idea just makes me break out in hives.


atdnext said...

Not The Palms... NOT THE PALMS!!!!!!!!!!!!!!

I'm really with you on this one, Mr. Steve. I'm also not a knee-jerk Harrah's hater... In fact, I just signed up for Total Rewards last weekend! But come on, we have too much corporate consolidation of the casino industry already. Harrah's and MGM Mirage control most of The Strip while Station and Boyd control most of the "locals' land".

The Palms is a special place that was made special by the Maloofs turning up the heat and the glamour, and it will be a real tragedy for the magic to disappear a la Harrah's taking over Rio.

Hiker said...

DId anyone ever hear about antitrust laws? Doesn't Harrah's own too much already? Even Howard Hughes wasn't allowed to buy more because he owned too much after his purchase of the Silver Slipper. Oh, I know, it's a new day. There are no antitrust regulators anymore.

Anonymous said...

Gee, maybe they can make it just as nice as they made the Rio.
This is the first time in my life that I have heard the Darth Vader theme in my mind as I was reading your story. I'm starting to scratch, as well.

Jeff in OKC

Michael said...

I think the problem that even the Nevada gaming commission has painted themself into the corner with is MGM still owns more strip properties. This would be ashame if it comes to fruition. Unfortunately Steve's newest post with George Maloof's response isn't showing up but if the headline is a solid implication, I'm pulling for him.

I'm visited the Palms once or twice and I've moved away from Harrahs over the years, but in my opinion the Palms is absolutely needed on/near the strip. Homegenized casinos that MGM and Harrahs are creating will only continue to erode the base that Vegas is preciously holding onto.

michael said...

it's now may 10th...
any update to this story?