Harrah's loses $274M in 2nd quarter

LAS VEGAS - Casino operator Harrah's Entertainment Inc. said Wednesday it lost $274 million during the second quarter as customers gambled less at its casinos in New Jersey, Louisiana, Mississippi and elsewhere.

The loss reported by the private Las Vegas-based company compared with a profit of just under $2.3 billion during the second quarter last year. Last year's quarter included almost $4.3 billion in gains for paying debt early at less than face value.

The company's revenue slipped 2.2 percent, to about $2.2 billion, compared with almost $2.3 billion during April-June 2009. Harrah's is the largest casino company in the world by revenue.

Harrah's CEO Gary Loveman said the company increased marketing and labor costs because it anticipates more demand at its more than 50 properties.

Revenue in Las Vegas increased to $712.7 million compared with $705.2 million last year because of the addition of Planet Hollywood, which Harrah's bought in February. Harrah's said revenue declined 8.2 percent among the Las Vegas casinos it owned last year and this year because of lower room rates and less spending by visitors.

In Atlantic City, N.J., Harrah's said its revenue declined 6.9 percent to $487.9 million compared with $516.2 million during the second quarter last year.

The company said its revenue in Louisiana and Mississippi dropped 5.1 percent to $298.7 million from $314.9 million last year.

"We've reduced expenses and debt substantially, increased our liquidity to about $3 billion and acquired the Planet Hollywood Resort and Casino in Las Vegas and Thistledown racetrack in Cleveland," Loveman said.

The company didn't report how much debt it has now, but Loveman said it is better positioned for growth than at any time during the past two years.

Harrah's reported earlier that it had $22.47 billion in debt as of March 31, but no significant debt due before 2015.

Harrah's has struggled with debt since equity firms Apollo Global Management LLC and TPG Capital LP took it private in January 2008. Harrah's assumed $12.4 billion in debt and $1 billion in transaction costs in the deal.

Harrah's raised $557 million in cash through a deal that gave the New York-based hedge fund run by billionaire John Paulson a 9.9 stake in the company as well as increased equity to Apollo and TPG.

Paulson & Co. Inc., Apollo and TPG agreed to buy $835 million worth of notes due from 2015 to 2017 for $557 million as part of the exchange.