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Best of Ken Adams

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Corporate Giant Watch: Harrah's - May 2003

31 May 2003

The world of casino gaming is not any simpler than the regulatory environment, in fact, it is the multiple and complex regulatory structures that create the differences in operating environments.  One way to make sense of the often-confusing national gaming scene is to watch one company in different environments.  There are only a few truly national companies, the major slot manufacturers and a couple of operating companies.  In following the Harrah's story this month you get a glance at financing, the impact of competition, the costs of regulation, the uses of technology, the spread of racinos, Indian gaming expansion, employee relations issues and novel marketing ideas.

Harrah's Entertainment Inc. said it has entered into an agreement for new credit facilities for up to $1.96 billion in borrowings.  …The new credit facilities consist of a five-year revolving credit facility for up to $1.06 billion and a five-year term facility for up to $900 million. Dow Jones, Yahoo Finance, 5-2-03

Dave Jonas is crossing his fingers that Atlantic City casinos snap out of their three-month revenue decline before the $1.1 billion Borgata Hotel Casino & Spa opens in June or July.  "If we don't see growth in May we're going to be in a heap of trouble," said Jonas, senior vice president of Atlantic City operations for Harrah's Entertainment.  He fears that casinos would be forced into a market-share war if there aren't enough gambling dollars to go around when Borgata opens.  Joe Weinert, The Press of Atlantic City, 5-5-03

The Missouri Gaming Commission has recommended a $100,000 fine against Harrah's St. Louis Casino in Maryland Heights, Mo., for mailing promotional materials to a woman on a state list of problem gamblers.  St. Louis Business Journal, 5-1-03

Harrah's Entertainment Inc. has signed an agreement to introduce "cashless" slot machines using technology from Alliance Gaming Corp.  …Bally's systems will also enhance the company's gambler tracking system by 'extending these systems' capabilities directly into our slot machines," Boushy said.  Bally's system is compatible with slot machines from all manufacturers, allowing Harrah's to install cashless technology in older machines, Boushy said.  Las Vegas Sun, 5-6-03

...We believe the slot floor of the future should be more system-centric than game-centric," Bruce Rowe, VP Harrah's noted.  He noted that server-based gaming – in which game outcomes are determined by random number generators located on a central server – is already in use in video lottery operations, some Indian gaming facilities and racinos.  International Gaming and Wagering Business, Vol. 24, No. 5, May 2003

Harrah's Entertainment, Inc. today opened its first casino located at a thoroughbred racetrack. Harrah's Louisiana Downs, located in Bossier City, is the first facility in northern Louisiana to offer the combination of live thoroughbred racing and slots. …The first phase expansion that opened today features a 905-slot machine casino that operates 24 hours per day, seven days per week.  PRNewswire-FirstCall, Yahoo Finance, 5-22-03

Narragansett Indian tribal leaders -- and their Las Vegas backers -- went to the State House yesterday armed with argument after argument for the casino they want to build in West Warwick.  Top executives from Harrah's Entertainment flew in from around the country. They joined Ronald Coia, president of the Rhode Island Building Trades Council, in announcing an "agreement in principle" to hire unionized labor.  Katherine Gregg, Providence Journal, 5-9-03

Harrah's Entertainment Inc. has won a 2003 "Employer of Choice" Award from the National Restaurant Association Educational Foundation and Coca-Cola North America.  …Harrah's was honored in the category of Specialty Food Service.  …"We are honored to publicly recognize Harrah's for its innovative programs; its efforts further enhance our industry's position as a cornerstone of career and employment opportunities,"a NRAED spokesman said. Reno Gazette-Journal, 5-15-03

Harrah's was ranked No. 1 for hotel operations by a gaming company in the first quarter 2003 Market Metrix Hospitality Index, which is comprised of 135 hotel brands, 25 airlines and 11 car rental companies.  Reno Gazette-Journal, 5-15-03

The newest addition to Harrah's outdoor Plaza, the Xtreme Park is open seven days a week from noon to 9 p.m. and features a variety of thrill ride attractions.  "The Xtreme Machine is the most exhilarating vertical attraction currently available in the world," said John Moriarty, co-owner of the Xtreme Park.  Reno Gazette-Journal, 5-8-03

Before June had a chance to really get going, Illinois passed a gaming tax increase.  Harrah's, along with every operator, will be impacted.  The Wall Street pundits speculate that all of the operators will try to reduce expenses, possibly even try to reduce revenues to stay within the lower tax bracket.  Reducing expenses may mean laying-off employees.  It may mean cutting down on participation games and it may mean reducing marketing efforts.  Reducing revenue is more intriguing; the operators can reduce hours, lower limits, and reduce complimentaries.  But there may be one more unusal way to reduce revenue, send the players to another casino, in another state.  It will be interesting to see if Harrah's tries to move some of their customers to the lower-tax-land of Indiana or even Nevada, New Jersey or Mississippi.  The ability to move players from one jurisdiction to another has always been one of the goals of the "Total Rewards" program.  This will be an excellent and financially advantageous time to test the system.  As a national company, Harrah's illustrates better than any other company that operating margins or the value of an individual player will differ radically from one jurisdiction to another.

Ken Adams

Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.
Ken Adams
Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.