There is trouble in Vegas this week as Harrah’s, one of the largest gambling casino companies as one victim to a drowning economy. The recent announcement in filing with the securities and exchange commission claimed that Perez is currently in $23.1 billion worth of debt.
The revenue of the company is down over 10% from 2007, and cash flow has decreased from 2.81 billion in 2007 to 2.36 billion in 2008. This is a critical point for Harrah’s casino as analysts are projecting further decline in the next two years, causing the company to be at risk of default.
With the increasing debt that Harrah’s Casino is accumulating, it doesn’t prevent their Chief Executive Officer Gary Loveman from receiving over $39 million last year. Figure is 157% increase over his 2007 salary.
In its current situation the accumulated debt will steer away loans of money, therefore affecting Harrah’s ability to advertise and create new opportunities for income.
Already Harrah’s has made dramatic cuts in the company by reducing their workers by over 7000. “Actions have been taken to reduce costs, but we fear these actions, albeit necessary, will aggravate an already discouraged work force and further degrade properties already in need of great repair,” said Andrew Zarnett, an analyst for Deutsche Bank.
He continued by saying: “This could have the unfortunate repercussion of alienating customers, forcing them to seek play at competitors.”
Is the skyline of Las Vegas continually changes in the economy continues to get worse, it’s conceivable that many casinos will be affected. Although gamblers continue to flock to Las Vegas is one of the top tourist destinations, they have tightened their grip on their wallets and are less likely to spend beyond their means. The analysts project that the economy will get worse before it gets better, in fact they are even suggesting that you prepare yourself for 2010.
