harrah’s casino

7/27/2019 Harrahs Casino

1/11

Harrahs EntertainmentInc.


2/11

Company Background

1937 - William Fisk Harrah opens his first bingoparlor at age 26 in Reno, NV.

1942 - Harrah opens up its first casino,equipped with blackjack tables, a dice table,and 20 slot machines.

1946 - Harrahs becomes the official companyname, and William expands the casino offeringsto include roulette, more card tables, liquor, and

a spotless, plush-carpeted interior. 1955 - Harrah buys an under-utilized casino

near Lake Tahoe. Within 4 years it had been renovated to become the

worlds largest single structure devoted to gambling,with 10 acres of parking lots and an 850-seat theaterrestaurant.


3/11

Why is it important to use the customer wothe DBM efforts rather than observed level o

Understand only cross-market visitation of the customers anshare of gaming dollars (36 cents) - not sufficient to increasetowards Harrahs brand

Projects the long term profit by calculating the theoretical athe house expects to win

In calculating customer worth, they have their own methodnot easily replicated by imitators (industry used the level of


4/11

Why is it important to use the customer wothe DBM efforts rather than observed level o

Level of Play Customer WorthUnderstand only cross-market visitation of the

customers and their share of gaming dollars (36

cents) - Not sufficient to increase loyalty towards

brand

Total Gold Card which is used to ca

data is the initial step to increase l

Based on past behavior Projects future worth of the custo

calculating the theoretical amountexpects to win

Base for long-term predictions Long-term predictions helps for cr

term profitability strategies

Traditional method to determine customer worth Harrahs patented method which

replicated by imitators/competito


5/11

Characteristics

$0

$500,000,000

$1,000,000,000

$1,500,000,000

$2,000,000,000

$2,500,000,000

$3,000,000,000

$3,500,000,000

1997 1998 1

$1,619,210,000

$2,004,015,000

$3,024,428,0

$1,358,687,000

$1,649,827,000

$99,388,000$102,024,000

Harrah's Income 1997-1999

Revenues Expenses Net Income

Harrahs has increased Revenueeach of the past 2 years.

Expenses, as a percentage of

Revenues, by year:

1997: 84%

1998: 82%

1999: 80%

Net Income stayed constant around

$100 million between 1997 and

1998, but increased by 204% in

1999.


6/11

Competitive Environment

Park Place Entertainment Corporation

The Flamingo Caesars Palace

Mirage R

Mirage

Las

Vegas


7/11


Circus Enterprises, Inc.

Circus

Circus

Luxor

Trump Hotels & Casino

Trump Plaza Atlantic City Tru


8/11


Park Place Corporation ($2.5 billion in revenues) Includes 18 casinos in Las Vegas, Atlantic City, New Orleans, Biloxiand Canada

Industry Leader; has many properties and caters to a diverse custo

Mirage Resorts ($1.52 billion) Main casinos in Las Vegas, but also owns properties in New Jersey

Mississippi, and Argentina.

Targets upper-middle and premium consumer segments

Controls 60% of the high roller market in Las Vegas.


9/11

Competitive Environment cont

Circus Enterprises, Inc. ($1.57 billion in revenues) Owns 10 casino resorts in Nevada, Mississippi, and Illinois. Strategy involves creating a fully integrated gaming resort complex

Las Vegas propertiesCircus Circus, Edgewater, Excalibur, Luxor, aMandalay Bay.

Trump Hotels & Casino Resorts ($1.4 billion)

Owns many hotels centered mainly in Atlantic City and a riverboatLake Michigan.

$133 million in losses last two years with no growth in revenue

Cater to high-end drive in customers and young affluents.


10/11

Market Share Among Competito

$[VAL

$[VALUE] b

$[VALUE] billion

$[VALUE] billion

$[VALUE] billion

Casino Industry Market Share

Harrah's Circus Mirage Park Place Trump


11/11

Customer Base

Approximately The top 26% of players account for 82% of revenues

Target Customer: Avid experienced players spent $2,000 annually and tended to v

in different areas

Average Las Vegas visitor spent $1329 on a 3-day stay.

harrah’s casino

Documents