Harrah's Losing Streak

Harrah's Entertainment has some of the smartest people in the business. The way they've integrated the Total Rewards program throughout their system has provided value where little may have previously existed.

That's why it is so surprising to see that the company has failed miserably in trying to get its message out to important constituents, potential operating jurisdictions and employees.

The vote last November in Rhode Island was an abject failure for the company. Trying to establish a casino resort with the Narragansett Tribe, the state held a referendum on the development. Harrah's spent millions of dollars, but went down to a huge defeat. It wasn't even close. (To be fair, it wasn't the first time this proposal went down to defeat, but considering the money invested by Harrah's, it should have been closer, at least.)

And this spring, Harrah's lost two votes in Atlantic City in which dealers in both Caesars and Bally's opted to be represented by a union that has done nothing for them, up till now. Again, the votes weren't close, demonstrating that Harrah's could not convince most of the voters that they represent a better option than an untested union.

With all the smarts in Harrah's Entertainment, you'd think they could have put together a team with a plan that would have at least checked the union efforts and made the votes close. But the discontent must be so deep within the dealers' ranks that it was impossible.

Harrah's better figure out what they're doing wrong quickly. The company is coming before many regulatory bodies within the next year that are evaluating the company's purchase by two private equity groups, Apollo Management and Texas Pacific. We expect the company's powers of persuasion will be tuned up to high to get the OKs that are so important to the future of the company.