The world's largest gaming company is believed to be eyeing the takeover of two major UK casino operators in a bid to break into the British market.
Harrah's Entertainment, worth about £6 billion, is reportedly studying a proposal to buy both Stanley Leisure and London Clubs International - two companies involved in their own ongoing £634 million merger talks.
Stanley operates Crockfords, The Colony Club, The Mint and The Palm Beach casinos in London - in addition to 41 sites in cities including Bristol, Liverpool and Birmingham.
LCI operates four casinos in London including Fifty and The Sportsman, as well as The Rendezvous in Southend and Brighton. It has plans for others in Manchester, Leeds, Blackpool, Nottingham and Glasgow.
According to sources in the gaming community, the American group had put together a detailed appraisal of both companies.
It is not known whether chief executive Gary Loveman will wait until the completion of the Stanley and LCI merger before making his move. However, it is thought that his company is keen to expand its international operations because of concerns about soaring construction costs in Las Vegas.
Founded in 1937, Las Vegas-based Harrah's owns or manages 40 casinos in three countries under the Harrah's, Rio, and Showboat names.
Last year it signed agreements to develop casino resorts in Slovenia and Madrid, as part of a number of overseas developments in the pipeline.
Consolidation of the industry has been on the cards in the UK since the shake-up of gaming laws paved the way for international operators to run new super-casinos proposed by the government.
Stanley has reported a surge in visitors to its provincial casinos on the back of the deregulation, which lifted the rule forcing new punters to register 24 hours in advance and scrapped limits on jackpot prizes.
Takeover speculation and improved trading since the gaming laws were relaxed has helped boost Stanley's share price from 418p in January 2005 to a high of 875p earlier this year, although the stock has slipped recently and closed at 600.5p on Friday.
LCI recently admitted that it lost £3.6 million before tax in its last financial year.
However, London Clubs said trading at its London venues was improving after a relatively slow start to its new financial year, while its provincial casino had seen increases in attendance and overseas trading was ahead year-on-year.
During the last year London Clubs sold its Les Ambassadeurs casino in London for £115 million to provide cash to develop existing licences and new licences following new gaming laws.
Meanwhile, Stanley Leisure recently said gamblers in London and Italy had taken the shine off an impressive performance at its provincial casinos.
Attendance has boomed by 17 per cent at the firm's 41 casinos outside the capital to help the company report increased annual operating profits before exceptional items of £33.4 million - up by 11 per cent from £30.2 million last year.
Pretax profits before exceptional items rose 97 per cent to £31.9 million. Turnover was up two per cent to £224.8 million.
It is thought that merger talks between Stanley and LCI could be concluded by the end of this month.