CR83-p62&63-Business 5&6:SJC-Casino Review 23/8/09 02:47 Page 1
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Nevada revenues still diving
Gross gaming revenues from all Nevada casinos
Business
continued their year-on-year fall in June, totalling
$818.2m (E578.4m), down 13.8 per cent on the same
month in 2008. The first six months in aggregate saw
statewide GGR down 13.7 per cent to $10.79bn
(E7.62bn). The Strip saw its revenues down 14.8 per
NEWS cent to $414.5m (E293m) in June with H1 down 15.3
per cent to $5.66bn (E4bn).
The private equity owners of Harrah’s are using every weapon in their finance
and accounting arsenal to reduce the company’s enormous debt burden and
save costs on every line of the activity report. Even though revenues continue to
fall, they are able to report some profit.
Debt repayment provisions
push Harrah’s back into profit
Q2 saw a dramatic decline in
PokerPro sales due to the
sluggish global economy
Poor economy
batters PokerTek
badbeat reduce overhead. Our
POKERTEK revenues reflect lower
international PokerPro
The manufacturer of the hardware sales and lower
automatic poker table sales to the traditional coin-
PokerPro, PokerTek, has op distribution channel.”
reported a big drop in He continued: “While
revenues in the second economic conditions
quarter, down more than 60 continue to present
per cent to just over $1.5m challenges, we are excited
(E1m) with a dramatic about the growth potential
decline in product sales, for…PokerPro [for which]
A bright spot for Harrah’s in the most
down 87 per cent to just new markets are opening up
recent reporting period is the
$313,800 (E222,600). that are ideal for our
completion of the convention centre at Recurring licence and product.”
Caesars Palace Las Vegas service fees also fell but by The last six months have
much less, 15 per cent, to been eventful for PokerTek:
$1.2m (E851,000). in February, the bankruptcy
papermoney the period’s figures were burden by around $1.8bn tion and meeting centre at With much lower product of Trump in Atlantic City
HARRAH’S ENTERTAINMENT affected by a $297.1m (E1.27bn) and decrease its Caesars Palace.” sales, costs were inevitably stalled its expansion into
(E210m) one-off charge for annual interest payments Revenues from the much less: operating that market, however, in
The world’s largest branded impairment of goodwill and by $73m (E51.6m). Harrah’s eight venues in the expenses fell more than 35 March it gained Nevada
casino operator, Harrah’s other intangible assets. The company also Las Vegas region in the per cent to $2.1m (E1.5m). approval for PokerPro, an
Entertainment, with 53 However, that modest managed to agree new terms second quarter were 19.2 At the bottom line, this event which doubled the
venues worldwide, has over- figure was much increased with other note holders to per cent down on last year resulted in a shortening of company’s share price. At
turned a first half loss from after pre-tax gain of $4.30bn eliminate or waive entirely at $705.2m (E498.5m), losses from the same period the end of May, then CEO
2008 by retiring around 7.5 (E3.04bn) related to the restrictive covenants and leading to an operating loss last year, improving them by Chris Halligan resigned
per cent of the huge $24bn early extinguishment of debt certain events of default con- of $123.3 (E87.2m). In the 16 per cent to a net loss of suddenly for personal
(E17bn) debt it was saddled following a debt exchange tained in the notes. half-year, revenues were $1.6m (E1.1m). reasons unrelated to
with after the leveraged offer and open market pur- “The second quarter down 19.8 per cent to The half year figures PokerTek, ending a 20-
buyout of Harrah’s by two chases of debt. financing activities enable $1.39bn (E983.7m) which showed a similar story with month tenure. In July it
private equity firms 21 The operating division to us to extend our average translated into an operating total revenues down 48 per appointed Raul Bouchot,
months ago. of Harrah’s Entertainment, debt maturity and improve profit of just $500,000 - 99.9 cent to $3.6m (E2.6m) and late of IGT and previously
Total revenues in the first Harrah’s Operating our overall liquidity,” said per cent less than the net losses shortened 15 per of Shuffle Master as
half of 2009 fell by 13 per Company Inc (HOC), chairman, president and $393.8m (E278.4m) profit cent to $3.4m (E2.4m). director of sales.
cent to $4.53bn (E3.20bn). exchanged around $3.6bn CEO of the company, Gary from H1/2008. Mark
However, the company (E2.54bn) principal amount Loveman. “We still face chal- The company said: “While Roberson, the
reported a pre-tax operating of new ten per cent second- lenges, particularly in Las hotel occupancy was strong company’s acting
profit from continuing oper- priority senior secured notes Vegas and Atlantic City, at nearly 95 per cent, second CEO and CFO,
ations of $2.15bn (E1.52bn), due in 2018 for approxi- though our cost-reduction quarter and first half rev- commented: “Our
compared to a $372.5m mately $5.4bn (E3.82bn), an efforts led to improved enues declined in the Las bottom line
(E263.3m) loss in the same aggregate principal amount second quarter EBITDA Vegas region from the year- results and
period of 2008. of outstanding debt with margins in other markets we earlier periods due to lower operating cash
The pre-tax profit from maturing dates ranging serve. A bright spot in Las spend per visitor and weak- flow improved as
the second quarter was from 2010 to 2018. This Vegas was the on-schedule ness in the group travel busi- we continued to
markedly lower at $6.3m, a allowed the company to opening this month of our ness, which led to lower streamline the
decrease of 98.1 per cent: reduce its overall debt new state-of-the-art conven- average daily room rates.” business and
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62 September 2009 • businessnews
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