Louisiana fine causes loss for Harrah’s merger partner

Friday, Jan. 28, 2000 | 12:11 p.m.

SUN STAFF AND WIRE REPORTS

ATLANTIC CITY -- Players International Inc. today reported a $3.8 million loss for the quarter ending Dec. 31, the result of a $10.2 million fine handed down by Louisiana in December.

The company's loss was 12 cents per diluted share. In the year-ago quarter, Players reported earnings of $1.2 million, or 4 cents per share.

Before one-time charges for the fine and merger costs, Players reported net earnings of $2.5 million, or 8 cents per share. Cash flow was $17.5 million, while revenues were $83.26 million.

Players is in the process of merging with Harrah's Entertainment Inc. of Las Vegas. But the company still faces regulatory hurdles in Louisiana and Illinois.

In its December settlement with Louisiana, Players agreed to pay the $10 million fine and leave the state. The settlement came after allegations that the company paid extortion money to former Louisiana Gov. Edwin Edwards and son Stephen in order to gain favorable licensing treatment.

Players was allowed to keep its Louisiana license until the Harrah's acquisition is complete, but Louisiana gaming regulators must still vote to approve the deal.

Meanwhile, Harrah's faces challenges in Illinois because of a lawsuit filed by rival developers.

Harrah's already owns a casino in Joliet, and would become the state's first two-casino operator if it acquires Players' Metropolis casino in southern Illinois. But a lawsuit has been filed challenging amendments to the state's regulations that allow operators to own more than one casino in the state.

Harrah's is pushing for approval of the Players deal at a Feb. 22 meeting of the Illinois Gaming Board. But regulators there say they're nervous about approving a deal, then being forced to close down the Metropolis casino.

Harrah's responded that the company is ready to deal with any constitutional challenges, and urged the board to move ahead anyway.