Caesars Palace casino expansion moving forward
12th August, 2008
Many casino projects in Las Vegas and other areas of the United States have come to a screeching halt as of late, due to a struggling economy, but the $1 billion project to expand Caesars Palace will continue as planned.
The current economic downturn in the United States has caused many other casinos to temporarily halt or shut down operations and expansion plans until the market weathers itself.
“Overall, the company indicated that the demand environment is tough, and they were not willing to estimate when the market would trough,” said Steven Wieczynski, gaming analyst for Stifel Nicolaus Capital Markets.
Harrah’s Entertainment has decided to go ahead with the project despite the fact that it reported a loss of $97.6 million in the second quarter and lost $285.4 million in the first six months of the year.
“The first half of the year presented us with the most turbulent economic conditions the industry has faced in years,” said Gary Loveman, Harrah’s CEO. “Customer visitation fell in the second quarter as consumers coped with higher fuel costs, declining asset values, the impact of widespread flooding in the Midwest and other financial challenges.”
Some insiders believe that it could be likely that Harrah’s Entertainment might be looking to get rid of some of its debt by buying it back.
“Management refused to discuss this, which only increases speculation that in fact this is something that is seriously being considered or is already under way,” said Barbara Cappaert, gaming analyst for KDP Investment Advisors.
By Michael
