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November 20, 2018

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Former Harrah’s exec regrets not expanding to Macau

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In this 2011 photo, Phil Satre, NV Energy chairman and former chairman of Harrah’s Entertainment, accepts an award, after being inducted into the Nevada Business Hall of Fame during a ceremony at the Mirage.

One regret Phil Satre has about his 25-year career with Harrah’s Entertainment is that he didn’t take the company into the Macau gaming market.

Satre, who spoke Wednesday on Nevada Newsmakers, retired as chairman of the board of Harrah’s Entertainment in 2005. The company later changed its name to Caesars Entertainment.

“Harrah’s missed out on Macau, and I will accept some of the responsibility for that,” Satre said. “I was at the tail end of my career, and we didn’t pursue it aggressively.”

Satre, a former standout Stanford University football player, is now chairman Nordstrom and IGT boards. He is a member of the American Gaming Association’s Gaming Hall of Fame and UNLV’s Business Hall of Fame.

Other gaming companies, including Wynn Resorts and Las Vegas Sands, pursued holdings in Macau, which has been the world’s No. 1 gaming market for more than a decade, overtaking Las Vegas in 2007.

“It turned out to be a remarkable market and, of course, the largest in the world and an incredibly important source of earnings for the companies that participate there,” Satre said.

Satre said Harrah’s decided to pass on Macau because it “had some serious concerns about the regulatory environment and the overall environment that existed from some early business that I had taken there.”

Some of Satre’s misgivings revolved around Macau gaming mogul Stanley Ho, who had a 40-year Chinese government-granted monopoly on Macau gaming until the government ended it in 2001, paving the way for the Las Vegas companies.

Ho had extensive ties to Chinese organized crime, which he let “operate and thrive” inside his casinos, according to a report from New Jersey gaming regulators.

Ho has denied any ties to organized crime. He has never been arrested on a gang-related crime, according to reports.

Satre, nonetheless, said he did not want to jeopardize the company’s U.S. holdings by getting involved in Macau.

“At the time, we had licenses not just in Nevada, but we had licenses throughout the United States — more than anybody else in the industry,” Satre said. “We had expanded our properties into more than 26 locations and to be honest with you, I was worried we would jeopardize those licenses because they would see us as having taken a reputational or regulatory risk that we didn’t need to take.”

In 2010, New Jersey regulators forced MGM to divest its holdings in Atlantic City because of a business relationship with Ho’s daughter, Pansy Ho.

“It did not surprise me at all,” he said. “Atlantic City was the toughest regulatory environment in operation.”

Fast forward, and Caesars Entertainment is now pursuing opportunities in Asia, including Japan, according to published reports.

Satre said he supports Caesars move into Japan, which approved legislation in December 2016 opening the door to U.S.-style casino resorts. “I think we will see that as another important market,” he said.