Harrah’s Reports A Huge Loss For The First Quarter
The $10.8 billion dollar gaming giant, reported losses of $195.6 million for the first quarter of 2010. According to sources, the losses were mostly due to debt repayments.
The gaming giant announced that the losses had increased by 47.4 percent compared to last year. The revenues for the first quarter, ending on March 31, 2010, slipped to $2.19 billion dollars from $2.54 billion dollars, during the same period, last year.
The losses were due to reduction in discretionary spending, lower room rentals and severe weather in the Midwest and the East.
The property cash flow for the company fell by 12 percent for the first quarter. The company paid $491.5 million in interest payments. It had to shell out another $47.4 million on early retirement of debts.
Gary Loveman, CEO, Says That Online Gaming Is The Future
According to Gary Loveman, chief executive officer at Harrah’s, the future of the company, will depend on the online gaming industry, after new gambling legislations are passed. Some say, that once the restriction on online gambling is lifted, billions of dollars will flow into the gambling industry.
The chief executive, said that the gaming industry, had entered into an unusual period of activity, and there were no signs of improvement in the current fiscal year. Taking this into consideration, the CEO said, that the company will not start working on the hotel tower at Caesars Tower, unless the market was ready to absorb the incremental capacity that will be generated. He said that the company will consider moving out of non key areas in order to consolidate the business.
The company survived a financial crisis last year, when it came close to defaulting on its debts. Through deft financial maneuvering, it was able to postpone its debts till 2015.
The executives at Harrah’s are following the developments in states like Ohio, Massachusetts and Maryland, which have huge potential for business development. According to Loveman, the legislation that aims to legalize online gambling will be passed, because it will create jobs and earn revenue for the government.
The company expects to benefit from the new legislation, as it has made substantial investment on online gaming.
Harrah’s Sells Rio All-Suite & Casino In Las Vegas
Earlier, there were reports that Harrah’s was selling the Rio All-Suite & Casino in Las Vegas. The value of the property is estimated at $500 million. The sale comes two months after the Nevada regulators had approved the acquisition of Planet Hollywood Resort and Casino. According to the deal, Harrah’s entertainment will take over the troubled resort and casino along with its debts. Sources say that the entertainment conglomerate will convert the $306 million debt into equity. The company plans to invest $30 million in cash. The deal is expected to strengthen the position of the company on the eastern side of Las Vegas.
The Rio, which hosts the World Series of Poker, is the only Las Vegas Casino that is not on the strip.
Harrah’s Entertainment, Inc. is the largest gaming company in the world. This $10.8 billion dollar giant owns and operates casinos, hotels and golf courses. Based in Paradise, Nevada, it is owned by Hamlet Holdings.
This company was created on October 30, 1937. Earlier, it operated as a small bingo parlor in Reno, Nevada. The company became a public limited company in 1971. It was the first gambling company listed on New York Stock Exchange.
Since then Harrah’s has grown exponentially, through acquisitions and developments. It has businesses in four continents. Caesars and Horseshoe are two brands that are associated with this company. Other business interests include the London Clubs International family of Casinos and the World Series of Poker. The company was acquired by affiliates of the private equity firm TPG Capital and Apollo Global Management in 2008.