Harrah’s may ditch auditing firm

Wednesday, March 20, 2002 | 9:49 a.m.

Harrah's Entertainment Inc. of Las Vegas is considering replacing auditing firm Arthur Andersen, following a move by New Jersey gaming regulators against the firm, the Wall Street Journal reported this morning.

The New Jersey Division of Gaming Enforcement initiated efforts Monday to bar the state's casino operators from using Andersen, following its indictment last week on obstruction of justice charges related to the Enron scandal. The request must be approved by the New Jersey Casino Control Commission.

That Harrah's would be looking for new firms surprised few observers in Las Vegas. Harrah's board previously recommended Andersen to shareholders, but the company operates two casinos in Atlantic City. One observer added that Andersen's main competitors for gaming auditing work had been "circling the waters" following the indictment.

Harrah's declined comment this morning, and Andersen officials in Las Vegasa could not be reached for comment.

The only other Las Vegas casino operator using Andersen with an Atlantic City tie is MGM MIRAGE. The company is building the $1 billion Borgata in partnership with Boyd Gaming Corp., and plans to open it in Atlantic City in 2003. But since it does not currently have a New Jersey license, it would not be compelled to immediately make a decision on Andersen.

"At the moment, we are talking to officials in New Jersey to determine what our options might be," said MGM MIRAGE spokesman Alan Feldman. "There is no reason to talk to other auditing firms yet."