Harrah’s Entertainment Look for Revenue From Online Poker

Harrah’s Entertainment Inc. is one of the largest casino operators in the world with major casino operations ranging from the United States to Europe. Harrah’s is also waiting anxiously for the day when legislation will make online poker a legal pastime in the United States.
The Chief Executive Officer of Harrah’s Entertainment Inc, Gary Loveman, acknowledges that the massive economic recession that is plaguing most economies around the world has had a significant impact on gaming companies including Harrah’s. Discretionary spending is way down and one of the industries hit hardest by this cut back is the gaming industry which has seen precipitous revenue declines in the past few years and severely discounting market capitalizations. The revenue slump, based on early data from this year, shows no signs of being alleviated in 2010 and could continue for years to come.
In fact, Harrah’s first quarter losses were worse for Q1 2010 than they were for Q1 2009 which does not bode well for the industry as a whole. 1st quarter revenue fell almost three percent which resulted in an additional 200 million dollars in losses for the already struggling gaming company.
THE LEGALIZATION OF ONLINE POKER
As a result of the extensive slump in the company’s revenues, they are looking at very little, if any, improvements in profits for fiscal year 2010 but projections for 2011 are slightly more optimistic thanks to the slow but noticeable economic recovery which is taking place. Additional casino openings in Las Vegas did not improve the company’s profits, but with the passage of a law in the United States which legalizes online poker, casino operators have a new source of revenue and profit that they can draw on to help alleviate their current financial troubles. The online poker industry is one of the largest online industries in the world and the United States online poker market is massive despite the fact that it is currently illegal. Legalization would allow American companies to participate in the industry which is currently dominated by off-shore corporations.
Harrah’s is behind the company behind the World Series of Poker Tournaments which have become the largest and most popular poker tournaments in the world. Every year the World Series of Poker attracts tens of thousands of players from all over the world with a total prize pool worth tens of millions of dollars. Harrah’s is also responsible for championing a bill that will legalize online poker in the United States and are in a strong position to benefit from passage of the bill. Gary Loveman is certain that the bill currently before congress will get approval because it will generate revenue for the government as well through taxation. The economic recession has had a negative impact on revenue for government entities as well and state, local, and federal governments alike are searching for new revenue streams to offset losses in other sectors. In addition to tax revenue, legalizing online poker in the United States could create more jobs for people in the US.
HARRAH’S VISION FOR FUTURE GROWTH
While Harrah’s is waiting patiently for the passage of the legislation that will legalize online poker, they are also in search of other opportunities around the globe that will help to pare down their losses and increase revenue. Despite the sagging economy, there is no lack of opportunities to be found in the global environment. Among the actions that are being considered as a means to increase revenue and generate profit for Harrah’s is the sale of non-performing assets. Recessions traditionally encourage the sale or spinning off of non-performing and non-core assets as a means to raise case. Loveman would not disclose any information on the sale of non-performing assets but there has been speculation about the sale of the Rio All-Suite Hotel and Casino in Las Vegas.
The company has also been considering increasing its oversees operation by venturing into operations in Asia which has weathered the recessions exceedingly well. China, in particular, is of interest because it is the single largest untapped market and continues to grow at an annualized rate of upwards of 10 percent although there are no current plans in place about venturing into the Chinese market. Other markets in the United States are also being eyed as potential options for expansion.
Harrah’s Entertainment Inc. currently operates more than fifty different casinos around the glove with many other gaming operations including Harrah’s Interactive Unit which is the online arm of the corporation.

Posted by Joel on May 14 2010. Filed under Poker News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry