Gamblers still spending despite economic woes, Harrah’s says

Thursday, Feb. 28, 2008 | 1:26 p.m.

For a company with more casinos nationwide than any other and that caters to Middle America, Harrah's Entertainment's income statement is probably one of the best indicators of whether Americans are still spending their hard-earned cash in casinos while the economy sputters.

They are at Harrah's properties, executives said Wednesday during the company's fourth quarter conference call.

The company's revenue and profit rose in the fourth quarter versus a year ago as well as for the full year 2007 compared with 2006. Revenue at properties open at least a year was flat from a year ago, however, as some properties fared more poorly than others.

While some markets like Atlantic City and the Gulf Coast continue to struggle against the competition, spending trends across the country bode well for the company, executives said.

Harrah's arguably has more information on how its customers spend money than any other company because of its sophisticated player tracking and loyalty card system called Total Rewards.

Customers who already spend little in the company's casinos – these tend to be people who don't have or use the company's Total Rewards loyalty cards – aren't visiting as often, bosses said. But those declines were more than offset by increased spending among customers who are using the card, with the largest increase among VIP gamblers who are the company's biggest spenders.

Business in Las Vegas has slowed down somewhat but it's "too early to tell" how significant a decline it will be, in part because future group business hasn't yet been booked, Chief Executive Gary Loveman said.

The convention business has slowed, with more groups cancelling their events and companies sending fewer attendees to shows, Loveman said – echoing recent statements made by competitor MGM Mirage.

Hotel occupancy remains high and gaming revenue is strong but room rates are off by a few dollars a night, he said.

Overall, fourth quarter operating profit rose 15 percent in Las Vegas.