Harrah's plans subscription casino site to debut in U.K.

Harrah's Entertainment Inc., the No. 2 U.S. casino company, is developing a subscription Internet gambling site that will debut in the U.K. The site's design is aimed at winning approval for use by U.S. gamblers.

Gamblers will pay between $17 and $84 a month to play games including bingo and win cash prizes of as much as $1.7 million at the ''Lucky Me'' site, Harrah's said. Harrah's has received U.K. regulatory approval to start the site in the first quarter of 2004.

The site won't include traditional casino games such as roulette, blackjack or slots that don't ''translate well'' to the Internet, and the subscription requirement may ease U.S. concerns about online gambling, the company said. Harrah's already has an agreement with Gala Group Ltd. to develop casinos in the U.K., where gambling is a multibillion-dollar industry.

''The U.K. market is going to be a substantial gambling market,'' said Marc Falcone, a Deutsche Bank Securities Inc. analyst, who rates Harrah's ''hold'' and doesn't own any of the shares. ''This will begin to introduce customers to the Harrah's brand.''

Investors liked the bet, and bid up the price of Harrah's stock by $1.69, or 3.7 percent, to close at $47.49. The stock has risen 20 percent this year.

Gamblers in the United States, where Internet bets are prohibited, will be unable to play. Harrah's said users will only be able to sign up for a limited amount of subscriptions, which may make U.S. legislators more willing to legalize the site, said Richard Mirman, Harrah's senior vice president of new business development.

''The idea that gives legislators problems is people sitting in their living room and feeding quarters into a computer,'' Mirman said.

About half of all Internet gamblers are based in the United States and wager illegally, Falcone estimated. That makes it difficult to operate a site profitably without U.S. gamblers, he said.

The ''Lucky Me'' site will keep U.S. gamblers off the site by credit-card checks and filtering software, Harrah's said. The Web site may be expanded to countries where online gambling is legal.

Casino companies including MGM Mirage have abandoned efforts to start Internet gambling sites.

MGM Mirage shut its Internet gambling unit in June, saying the laws governing online wagering in the U.S. and other countries were ''unclear.'' Kerzner International Ltd., owner of the Atlantis Resort on Paradise Island in the Bahamas, ended its Web site in January, saying it was difficult to make a profit.

Harrah's site will be developed with Revahertz Networks, a Boston-based software developer. Revahertz will raise money for the site, which will reduce Harrah's investment in the venture, Mirman said.