Casino owner and operator Harrah's Entertainment
Continuing with the "Las Vegas is Hot" theme, Strip rival MGM Mirage
So just in case you've forgotten, the two companies behind the mega-merger ruckus on the Las Vegas Strip do, in fact, generate boatloads of cash.
I'm still a little stunned by all of this. Last month, when MGM Mirage and Mandalay Resort Group
Back then, I thought that was the dumbest thing I'd ever heard.
I still do. Everywhere I look, the talk is about all the numbers that don't matter -- that Harrah's will have so many more casinos than anyone else, that Harrah's will have so many more slot machines than anyone else, and that Harrah's will have so many more employees than anyone else. And because of that, Harrah's can be No. 1!
Trust me: Harrah's management is not that stupid. And if you really think they are, you should have sold a long time ago.
I made it out to Vegas last week for the Ameristar Casinos
That certainly makes sense. The only way Harrah's could have Caesars' key Strip assets -- the ones they wanted badly -- was to take on the whole mess.
Just look at how a Harrah's/Caesars union increases the impact of the 61,000 slots approved in Pennsylvania earlier this month (see The Magnitude of Pennsylvania's Slots). Combined, Harrah's and Caesars control half the Atlantic City market and stand to lose the most when the slots -- the ones from International Game Technology
And to make matters worse, the rule in Pennsylvania is one property per company. So now the combined Harrah's/Caesars only gets one shot total in Pennsylvania, rather than one each.
That is hardly an attractive set of circumstances. If Harrah's could have had its way, I'm certain it would have plucked a few key parts of its choosing, not swallow Caesars whole. I still think Harrah's jumped the gun (see No Quick Win in Casino Merger), but who's going to blame them?
Fool contributor Jeff Hwang owns shares of Ameristar Casinos and International Game Technology.