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Harrah’s Entertainment Sets Tentative Contract

Harrah’s Entertainment, Inc.
reached a tentative five-year agreement providing wage and benefit
increases averaging about 4.2 percent annually to members of the
UNITE-HERE Local 54 union in Atlantic City, setting the stage for the end
of a month-long walkout. Union members are scheduled to vote Wednesday on the proposed contract,
which union leaders supported. If the members approve the pact, they could
be back at work Thursday.

The proposed contract is not expected to have a material impact on the
financial results of Harrah’s two Atlantic City properties over the next
five years. October 2004 revenues were approximately 8 percent lower at
Harrah’s Atlantic City and 3.5 percent lower at the Showboat Atlantic City
than in October 2003, as visitor volume declined during the walkout.

“The strike has been difficult for everyone involved,” said Harrah’s
Entertainment President and Chief Executive Officer Gary Loveman.
“However, I believe this new contract and the past 20 years of mutually
beneficial relationships better define our long-term relations with the
union and its members far better than did the last month.

“I’m pleased that we were able to reach an agreement with union leaders to
provide a long-term contract that offers good benefits and longer-term job
security to its members,” Loveman said. “We and other Atlantic City casino
operators also benefit from a contract that provides for the five years of
labor peace we sought as an industry.

“I’m optimistic we can quickly restore our traditional strong
relationships with the union members who are so important to the success
of our Atlantic City properties,” Loveman said. “We look forward to
welcoming them back to the Harrah’s family and working together to provide
our customers with the superior service and casino-entertainment
experience they have come to expect from Harrah’s Atlantic City and the


“I want to give special thanks to the non-striking employees and
volunteers who worked tirelessly to keep our properties operating under
trying circumstances,” he said. “I appreciate the understanding of the
customers who patronized our properties over the past month. And I’m
grateful to the Atlantic City community for its patience during the