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Harrah’s Entertainment Inc. this week disclosed its interest in managing a casino in Slovakia, part of the gambling company’s ongoing search for low-cost expansion in Eastern Europe.
The Las Vegas-based company has signed a non-binding letter of intent with TriGranit, a Hungarian developer, to manage casinos and hotels that would be part of a $2 billion mixed development known as “Metropolis” outside of Bratislava, Slovakia, senior vice president of communications and government relations Jan Jones confirmed Wednesday.
The involvement from Harrah’s was disclosed this week by TriGranit in Bratislava.
Under the plan, Harrah’s would contribute less than $50 million to the project, Ms. Jones said. There is still no guarantee the deal will go through. Harrah’s involvement is dependent on TriGranit receiving the necessary governmental approvals to proceed with the development. Even if it succeeds, it could some time before the project breaks ground, Ms. Jones said.
Harrah’s has made several prior attempts to enter Eastern Europe, but so far has not been able to secure entry. A plan to partner with a Slovenian company to develop a casino there was shelved last year. Ms. Jones said Harrah’s believes the region offers a huge potential market with access to gamblers from Russia, Norway, Italy and Austria. While gambling is legal in many Eastern European countries, few large casino resorts have been approved there.
In July, Russia closed down all of its casinos under a government plan that will relegate casinos to one of four zones located outside of the cities.
“Since all of Russia gambling closed down without the new gambling districts opening, there’s a belief that there’s real opportunity to build new projects in surrounding countries,” Ms. Jones said.
Harrah’s is one of several debt-laden casino companies that can’t afford expensive new expansion. Instead, these companies are trying to spread their brands by brokering management deals that rely on outside partners to fund most of the capital for a new project.
Another Las Vegas-based company, MGM Mirage, is planning to franchise some of its landmark casino brands throughout the Middle East through a new hotel-management division.
TriGranit’s proposed project in Slovakia would combine housing, retail, casinos, hotels and a theme park.