Harrah’s Casino
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Transcript of Harrah’s Casino
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Harrahs EntertainmentInc.
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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.
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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
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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
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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.
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Competitive Environment
Park Place Entertainment Corporation
The Flamingo Caesars Palace
Mirage R
Mirage
Las
Vegas
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Competitive Environment
Circus Enterprises, Inc.
Circus
Circus
Luxor
Trump Hotels & Casino
Trump Plaza Atlantic City Tru
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Competitive Environment
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.
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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.
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Market Share Among Competito
$[VAL
$[VALUE] b
$[VALUE] billion
$[VALUE] billion
$[VALUE] billion
Casino Industry Market Share
Harrah's Circus Mirage Park Place Trump
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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.