Dividing real estate from operations began in the hotel industrya decade ago. For casino operators, the separation is decidedlymore complex in part due to their strict regulation. One possiblebenefit of the division is that owners of the real estate might nolonger have to endure the state's lengthy licensing process becausethey would not also be operating the casino. If that turned out tobe the case, it would allow Harrah's to sell off its real estatewhile retaining long-term operating contracts.

Harrah's initial consideration of splitting real estate fromoperations occurred during the first quarter of 2006, according tothe regulatory filing. The company "met and had various exploratorydiscussions with representatives of [Texas Pacific Group] regardingthe feasibility and potential value of separating the company'sreal estate assets and business operations into separatebusinesses."

In April 2006, the company determined it would not proceed withimplementing a PropCo/OpCo structure and the discussions wereterminated, according to the filing. A few months later, in August,company executives were in talks with both TPG and Apollo regardinga leveraged buy-out, and discussions the division of property andoperating components was back in play.