Harrah's New Orleans Casino Sees Brighter Times Ahead
Harrah's New Orleans Casino has seen some rough times. The casino has declared bankruptcy twice, and it was shuttered for over six months by the disaster that was Hurricane Katrina. But things are looking bright now; so much so that the third-party guarantee provided by Harrah's Entertainment to the state of Louisiana will no longer be required.
After reopening in February of 2006, the casino has done increasingly booming business. The fiscal year that ended March 31st, 2007 saw the casino reap $390 million in revenue, with that figure projected to rise to around $408 million this year. This allows the casino to invoke a clause in its contract with the state, removing the need for a third party to back the casino's tax debt to the state.
Harrah's Entertainment had provided the necessary backing since renegotiating the operating contract in 2001. In return for the state lowering the minimum payment by the casino from $100 million to $60 million, the parent company promised to fill any payment gaps the casino could not meet. By generating over $350 million in income for two consecutive years, the casino has freed Harrah's Entertainment from future commitments, although the contract has a three-year outward clause, thus ending the parent company's obligation in 2011.
As New Orleans tourism continues to recuperate from Katrina, the casino has become more of the central identity of the city, along with the French Quarter, Canal Street, and the Superdome. Over the weekend in which the city hosted the recent NBA All-Star Game, Harrah's had so many visitors a waiting line was set up, and new customers could only enter as others exited, the first time that capacity had to be monitored.
