Casino execs take offensive, back stimulus

Oct 23, 2009 (Las Vegas Review-Journal - McClatchy-Tribune Information Services via COMTEX) -- HET | Quote | Chart | News | PowerRating -- Without several provisions in the federal stimulus bill, Nevada government might have shut down, jobs would have been lost and casino corporations wouldn't have been able to restructure some of their long-term debt, sending additional companies into bankruptcy.

That was the message Thursday from executives with Harrah's Entertainment and Station Casinos, who sought to place a different spin on the current wave of critical commentary coming from rival casino operators about efforts by the Obama administration and Congress to prop up the sagging economy.

Harrah's Senior Vice President Jan Jones and Station Casinos Executive Vice President Scott Nielson added that parts of the bill that helped Nevada's gaming industry wouldn't have happened without the work of Senate Majority Leader Harry Reid.

"So many of the jobs existing today are the result of the vision and leadership of the government and our majority leader," said Jones, a former two-term mayor of Las Vegas who twice ran for Nevada governor.

Jones and Nielson were so effusive in their support of Reid that a reporter from The Associated Press asked on the conference call if the briefing was an event for the Reid re-election campaign.

In response, Jones said positive aspects of the federal stimulus package -- the American Recovery and Reinvestment Act -- had been overlooked in recent news accounts of the state's 13.3 percent unemployment rate and in comments made on cable television news programs by Wynn Resorts Chairman Steve Wynn, who was critical of President Obama and his handling of the economy.

"There has been some very vocal criticism of the administration," Jones said. "But what has gotten lost and what people have forgotten are some of the ways the stimulus bill has helped the state and its largest industry."

Jones said stimulus dollars that came into Nevada helped close a budget deficit and allowed the state to continue operating.

Reid spokesman Jon Summers, who did not participate in the conference call with reporters, said the stimulus dollars that came into the state saved 6,134 jobs. He said when the 31,000 workers employed by Harrah's Entertainment are included, the overall jobs created or saved by the stimulus package is well above the 34,000 that had been estimated.

A provision in the stimulus bill that allowed companies to cancel capital gains tax payments for up to five years when they swap or restructure debt has helped Harrah's, Jones said. Harrah's has reduced its multibillion-dollar debt load by $3 billion and the company wants to sell up to $750 million of new term loans under its current credit agreement.

Harrah's has nearly $501.8 million in debt maturing next year and $168.9 million due in 2011, an August filing with the Securities and Exchange Commission showed. Harrah's has $6.3 billion in term loans maturing by 2015 and a $1.1 billion credit facility that matures a year earlier, SEC filings show.

"I think we would have been under much more pressure to be able to meet all the covenants in a continuing declining market without that provision," Jones said.

Station Casinos, which filed for Chapter 11 bankruptcy protection in August, could still use the debt cancellation provision once it emerges with a plan of reorganization and if a debt swap is part of the process.

Nielson said a debt swap had been proposed to the company's bond holders when Station Casinos was negotiating a prepackaged bankruptcy plan. The company would have been able to defer paying capital gains taxes.

"These unintended cash gains on paper have huge cash requirements, and we need the cash to operate our businesses," Nielson said.

Jones also used the conference call to push for a broad based business tax to be enacted during the 2011 legislative session with the state facing a $2.4 billion budget shortfall.

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