Harrah's Watch - March 2003

The Town Council moved last week to bring gambling to the town's business park, where the Narragansett Indian tribe and Las Vegas-based Harrah's Entertainment Inc. propose to build a resort-style casino.  Under the terms of an agreement approved last week, Harrah's is to pay the town for studies of the local effects of gambling…  Providence Journal Bulletin, LV Sun, 3-3-03

Harrah's Entertainment Inc. manages the Harrah's Rincon Casino and Resort near San Diego for the Rincon San Luiseno Band of Mission Indians. …recently joined a coalition of 21 California tribes that became the first in the state to formally announce their desire to discuss sharing casino revenue with the state in exchange for expanding the number of slot machines at their casinos, among other issues.  Liz Benston, Las Vegas Sun, 3-6-03

The chief executive of Harrah's Entertainment Inc…said yesterday he thought there was a ''50-50'' chance casinos would be allowed in Massachusetts in the near future.  Thomas C. Palmer Jr., Boston Globe, 3-26-03

Harrah's set the tone for the rest of industry in several other areas this month, too.  With the Wheel of Fortune agreement, Harrah's not only gains prime time exposure to a huge viewing audience, but also gains access to a data base of people who register for the sweepstakes.

Wheel of Fortune, America's #1 rated syndicated television series, and Harrah's Entertainment, Inc. have signed a cross-promotion deal bringing together these two industry leaders for the first time.  …Harrah's will sponsor the in-show Wheel of Fortune $100,000 Bonus Round. In addition, daily 10-second promotional spots aired during the show will encourage all viewers 21 and older to log onto www.wheeloffortune.com to register for a $100,000 online sweepstakes.  …Finalists from the May drawing will participate in a grand prize …when Wheel of Fortune co-host Vanna White will present the check to one lucky winner.  PRNewswire-FirstCall, Yahoo Business, 3-3-03

Size helps.  Because of its size, Harrah's was able to negotiate a separate tax deal in Iowa.  The deal only makes sense because Harrah's has casinos and a racetrack, additional costs at one are offset by gains at the other.

HET agreed with the state of Iowa on a 30% tax rate for their Bluffs Run Racetrack and Casino.  Currently, they are paying 20%, the same as riverboats but if the U.S. Supreme Court reverses the decision, they will be paying 32% to 36% and probably will be liable for the differences during the 20% months. … HET has the second highest grossing riverboat in the state.  So if they pay 30% at Bluffs Run, down from what was paid at this time last year, and in return there is no increase at their riverboat, they are ahead of the game.   Gaming Industry Weekly Report, 3-28-03

In the first week of war, with casinos in most every jurisdiction and a very diverse customer base, Harrah's hasn't felt the impact of war, yet.

Harrah's Entertainment Inc. has not modified its forecast for 2003 earnings growth despite the war in Iraq, the chief executive of the No. 3 casino operator said on Tuesday.  …"Our business has held up very well," Loveman told reporters after discussing the potential for gambling in Massachusetts at a meeting of the state chapter of the National Association of Industrial and Office Properties.  Reuters, Yahoo Finance, 3-25-03

It is too soon for Harrah's or any of us to know what to expect, except that Harrah's will continue to work to find unique solutions to industry problems and to expand its revenue base as much as possible.