Harrah's in British venture

Harrah's Entertainment Inc. and Gala Group Holdings, the largest bingo operator in Great Britain, are expected to sign a $1 billion joint venture development agreement today, sources close to the development told the Review-Journal.

Together, the two companies plan to take Las Vegas-style gambling to Britain by building eight new casinos ranging in size from 30,000 square feet to 50,000 square feet across the United Kingdom.

The casinos in England will be equivalent in size to Harrah's riverboat casinos in the Midwestern United States and one-third to one-half the size of the casinos at the Rio and Harrah's on the Strip.

Harrah's, the most profitable gaming operator in the United States, is expected to build the regional casinos, each of which will be operated under the Gala Group brand with a wide selection of entertainment and dining opportunities.

Each of the casinos also will carry a program similar to Harrah's Total Rewards.

Harrah's Chief Executive Officer Gary Loveman was traveling to England on Tuesday and could not be reached for comment.

On its own, Harrah's intends to independently pursue the development of destination casino resorts under its own brand in England.

The Financial Times had speculated two weeks ago that the Gala Group and Harrah's, the second-largest U.S. casino company, were negotiating a joint venture.

The new partnership agreement is contingent on the British Parliament adopting legislation to deregulate or liberalize the country's existing gaming laws.

Changes to U.K. gambling laws, which include scrapping permitted zones for casinos, have been postponed until 2005 due to the busy parliamentary program, the paper reported at the time.

The Gala Group is the leading high-volume, low-stakes retail gaming group in Great Britain, with approximately 35 million player visits a year at 193 sites. Gala has more than 5 million bingo members, more than 1.2 million casino members and approximately 10,000 employees.

The company has 166 bingo clubs across Great Britain, more than one-third of the National Bingo Game ticket sales and a typical weekly payout of ?18 million, or $30 million, in prize money.

Gala is also one of the largest multisite machine operators in Great Britain, with 7,000 fruit machines and 86,000 mechanized cash bingo units. It's also one of Great Britain's largest casino operators, with 28 casinos across the England, Isle of Man and Gibraltar.

The Group has an online gaming presence through Gala Interactive and offers a variety of casino and gambling sites.

Harrah's shares rose 21 cents, or 0.51 percent, Tuesday to close at $41.39.