High Graphics | BBC Sport>>
Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | AudioVideo | High Graphics | BBC SPORT>>
Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | AudioVideo |
Business Contents: Market Data | Economy | Companies | E-Commerce | Your Money | Business Basics |

BBC News Online: Business


Tuesday, 30 October, 2001, 20:22 GMT

Casino hopes for Maxim effect


A major US gambling firm is hoping that laddish panache can add swagger to its ailing Las Vegas casino.

In a highly unusual deal, Harrah's has joined forces with Maxim, America's best-selling "lad's" magazine, with the aim of launching a Maxim-branded lounge at its Rio Hotel & Casino.

The Maxim lounge, which is targeted at an upmarket New York and Hollywood crowd, will launch on 17 November to coincide with the first major boxing event in Vegas since the 11 September attacks.

Harrah's - not to mention other gambling firms - hopes that it could signal the beginning of the revival of the gaming sector, which has been hit hard by the effects of the attacks.

While all entertainment firms have suffered, Las Vegas has been particularly hard-hit, since it relies almost entirely on visitors arriving by air.

A risque move?

Harrah's Maxim tie-up is a highly unusual deal: most of its rivals have striven to portray gambling as a wholesome, family-friendly activity.

Maxim magazine cover
Maxim, published by Britain's Dennis Publishing, is notorious in the US for its risque, raunchy content, including plentiful female nudity.

But Harrah's Gary Thompson told BBC News Online that he was convinced the move was canny.

"We have resisted this family orientation; we don't believe that anyone under 21 should be in casinos in the first place," he said.

The Maxim lounge aims to draw a share of the celebrity crowd expected in Las Vegas for the upcoming world-title boxing bout between Lennox Lewis and Hasim "The Rock" Rahman.

Rio's woes

Mr Thompson hopes the Maxim lounge could help turn around the fortunes of the Rio, which has suffered not merely from the post-attacks slump, but from a sharp increase in competition in the Vegas market.

Hasim
The casino was recently forced to reposition itself, pulling out of heavy investments in facilities and entertainment, in order to focus on basic gambling.

Unlike most of its rivals, which rely heavily on revenues from accomodation, food and showbusiness, Harrah's earns 80% of its money from gaming.

And it has a strong track record in joint ventures: aside from the new Maxim deal, it has marketing partnerships with Coca-Cola, credit-card firm MBNA and NASCAR, the American motor-racing association.

Crunch time for casinos

The Maxim lounge will initially be a one-off, but could become a permanent feature if things go well next month.

Las Vegas by night
For Harrah's, and Las Vegas, it could be crucial.

The Vegas gambling industry has already seen a raft of high-profile casualties, most recently the bankruptcy of the Aladdin casino, owned by Britain's London Clubs International.

And on Tuesday, MGM Mirage - which operates some of Las Vegas' biggest casinos - said that third-quarter profits had more than halved.

Harrah's edge

Harrah's claims it has the edge on its competitors; while most gaming and entertainment shares have slumped in the past month, Harrah's stock has surged by 25% since 11 September.

Mr Thompson said that the firm's resilience was thanks to its investments in riverboat gambling outside the main Las Vegas and Atlantic City markets.

Riverboats now account for half the company's revenues.

And by offering attractive package deals to its riverboat customers, Harrah's has been able to maintain 90-100% occupancy rates at the Rio, Mr Thompson said.

This compares with 85% occupancy at best for MGM Mirage, and 50-60% for some others.


Related to this story:
Casino firm loses Vegas gamble (30 Sep 01 | Business) US showbusiness shuts down (12 Sep 01 | Showbiz) Blackpool: The new Las Vegas? (17 Jul 01 | Business) Gambling laws 'set for overhaul' (05 Apr 01 | UK Politics) Vegas gambles on cyberspace (05 Jun 01 | Americas) Bookies braced for record takings (06 Apr 01 | Business) Australia may ban online gambling (28 Mar 01 | Business)


Internet links: Harrah's Rio casino | Maxim |
The BBC is not responsible for the content of external internet sites
High Graphics | BBC Sport>>
Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | AudioVideo | High Graphics | BBC SPORT>>
Front Page | World | UK | UK Politics | Business | Sci/Tech | Health | Education | Entertainment | Talking Point | AudioVideo |
Business Contents: Market Data | Economy | Companies | E-Commerce | Your Money | Business Basics |

Back to top | BBC News Home | BBC Homepage | ©