New Orleans (Reuters) – Harrah’s Entertainment Inc., the world’s top gambling firm, on Monday forecast a slow recovery in its hurricane-ravaged casino business in Louisiana and Mississippi, but was confident about the long-term prospects.
Three days before the reopening of its New Orleans casino, Harrah’s Chief Executive Gary Loveman told Reuters he expected business there would be „considerably off from where it has been.“
„We think we’ll do well, but we won’t be back at our former levels for some time,“ Loveman said in an interview.
Harrah’s, a major revenue earner for the cash-strapped city and Louisiana state, was dealt a heavy blow by Hurricane Katrina, which also forced it to close its Lake Charles resort in Louisiana.
The storm destroyed its Gulfport, Mississippi, casino, which it has since opted to sell rather than rebuild. The company says it remains committed to developing „a first-class resort“ in Biloxi, Mississippi, where its offshore casino was also destroyed by the late-August storm.
Loveman said he expected the New Orleans casino to see „vigorous“ demand from local gamblers, driven by the influx of building contractors and federal employees involved with reconstruction efforts.
„We’ll see what happens with the regional and national tourist groups,“ he said, adding that such customers, who made up 50 percent of the casino’s pre-Katrina businesses, could prove more difficult to lure back.
„It’s beginning to return now,“ he said of the city’s battered tourism industry. „I think we’re finally beginning to see people return to the city, and how quickly that happens is a little hard to guess.“
The casino, close to the city’s historic French Quarter, will open in time for the annual Mardi Gras carnival with 1,250 employees, down from 3,000 before the storm.
Work also continues on a new 450-room hotel, conference center and restaurant at Harrah’s New Orleans. The $ 150 million expansion project is expected to open in September 2006.
Loveman said Harrah’s was likely to invest „north of USD 1 billion“ in replacing its casino in Biloxi.
„In Mississippi, it’s a different problem (compared to Louisiana), because the facilities there were completely destroyed,“ he said. „In Biloxi, we’ll have a temporary casino up and running some time in the late part of summer.“
Harrah’s shares closed down 75 cents, or 1.04 percent, at USD 71.30 on the New York Stock Exchange.