Harrah’s invests in Macau, of course

Harrah's Entertainment finally has a business footprint in the Chinese gaming enclave of Macau, but it is not a casino.

The gaming company announced Wednesday that it is buying the Macau Orient Golf club for an undisclosed amount.

Michael Chen, president of the Asia-Pacific region for Harrah's Entertainment, said the golf course gives the company a way to service its customers that live or visit the area.

"Macau is, obviously, a very important market," Chen said. "We have lots of customers at Caesars Palace that are from the Asian region, and they go to Macau a lot. We want to have a business in Macau where we can touch those customers, even if it has to be nongaming."

The company had marketing offices in Hong Kong, Singapore, Tokyo and Taipei, Taiwan, under the Caesars brand, to address customers in Asia.

The 175-acre course and adjoining golf club are near the Cotai Strip, adjacent to the Lotus Bridge, one of the two border crossings from China.

The 18-hole, par-72 course is a mile south of the newly opened Venetian Macau.

The course has been open a year and is one of two golf courses in Macau.

"Customers don't have a lot of choices," Chen said. "With all the development that is coming online and the visitation increases, this is an important amenity for the market."

While the golf course gives Harrah's a business in Macau, the company still does not have a coveted gaming concession like other Las Vegas-based gaming companies.

Wynn Resorts Ltd. owns the Wynn Macau and MGM Mirage has the $1.1 billion MGM Grand Macau under construction.

The Las Vegas Sands has two properties, Sands Macau and the recently opened Venetian Macau. The company plans nine resorts in the Cotai Strip region.

Chen said Harrah's does not have any near-term plans to build a casino or partner with a company that holds a gaming concession.

Despite what Chen said, Morgan Stanley gaming analyst Celeste Brown said Harrah's purchase may be a way to partner with a company holding a concession or receive one of its own in 2009.

"Practically, they will likely start design soon and link up with one of the Hong Kong-listed gaming companies to use their license," Brown said in a note to investors. "Plan B, if the government doesn't want to let them build immediately would be to sit on the land to sell later to concession holders."

Chen said there is no legal framework in Macau at the moment that would allow Harrah's to pursue gaming.

"You can't make an investment like this with any certainty any of those things can happen," Chen said.

Harrah's owns six golf courses in the United States, including Rio Secco Golf Club in Henderson and Cascata Golf Club in Boulder City.

The company is developing courses in Spain and the Bahamas to accompany new Caesars-branded resorts.

Harrah's Entertainment is in the regulatory process of being purchased for $17.1 billion, or $90 per share, by private-equity firms Apollo Management and Texas Pacific Group.

Harrah's stock fell 5 cents, or 0.06 percent, Wednesday to close at $86.59 on the New York Stock Exchange.

The Associated Press contributed to this report.