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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM 10-Q

(MARK ONE)

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______________ TO ______________

COMMISSION FILE NO. 1-10410

------------------------

HARRAH'S ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

DELAWARE I.R.S. NO. 62-1411755
(State of Incorporation) (I.R.S. Employer Identification No.)

5100 W. SAHARA AVENUE, SUITE 200
LAS VEGAS, NEVADA 89146
(Current address of principal executive offices)

(702) 579-2300
(Registrant's telephone number, including area code)

------------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

At March 31, 2000, there were outstanding 122,224,970 shares of the
Company's Common Stock.

Page 1 of 28

Exhibit Index Page 29

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PART I--FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited Consolidated Condensed Financial Statements of
Harrah's Entertainment, Inc., a Delaware corporation, have been prepared in
accordance with the instructions to Form 10-Q and, therefore, do not include all
information and notes necessary for complete financial statements in conformity
with generally accepted accounting principles. The results for the periods
indicated are unaudited, but reflect all adjustments (consisting only of normal
recurring adjustments), which management considers necessary for a fair
presentation of operating results. Results of operations for interim periods are
not necessarily indicative of a full year of operations. See Note 2 to these
Consolidated Condensed Financial Statements regarding the completion of our
acquisition of Players International, Inc. on March 22, 2000. These Consolidated
Condensed Financial Statements should be read in conjunction with the
Consolidated Financial Statements and notes thereto included in our 1999 Annual
Report to Stockholders.

HARRAH'S ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(UNAUDITED)

MARCH 31, DEC. 31,
2000 1999
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) ---------- ----------

ASSETS
Current assets
Cash and cash equivalents................................. $ 222,826 $ 233,581
Receivables, less allowance for doubtful accounts of
$44,958 and $44,086..................................... 113,092 121,186
Deferred income taxes..................................... 33,610 33,208
Prepayments and other..................................... 75,860 68,028
Inventories............................................... 28,577 30,666
---------- ----------
Total current assets.................................... 473,965 486,669
---------- ----------
Land, buildings, riverboats and equipment................... 4,468,413 3,983,754
Less: accumulated depreciation.............................. (995,014) (922,524)
---------- ----------
3,473,399 3,061,230
Goodwill, net of amortization of $58,053 and $54,346
(Note 2).................................................. 674,493 505,217
Investments in and advances to nonconsolidated affiliates... 95,118 168,511
Deferred costs, trademarks and other........................ 364,347 545,220
---------- ----------
$5,081,322 $4,766,847
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable.......................................... $ 68,880 $ 81,200
Accrued expenses.......................................... 344,832 287,494
Short-term debt........................................... 65,000 --
Current portion of long-term debt......................... 2,975 2,877
---------- ----------
Total current liabilities............................... 481,687 371,571
Long-term debt.............................................. 2,755,718 2,540,268
Deferred credits and other.................................. 139,446 120,827
Deferred income taxes....................................... 219,609 228,955
---------- ----------
3,596,460 3,261,621
---------- ----------
Minority interests.......................................... 20,337 18,949
---------- ----------
Commitments and contingencies (Notes 4, 6, 7 and 8)
Stockholders' equity
Common stock, $0.10 par value, authorized 360,000,000
shares, outstanding 122,224,970 and 124,379,760 shares
(net of 12,928,454 and 9,286,772 shares held in
treasury)............................................... 12,222 12,438
Capital surplus........................................... 1,007,580 987,322
Retained earnings......................................... 466,055 512,539
Accumulated other comprehensive income.................... (36) (493)
Deferred compensation related to restricted stock......... (21,296) (25,529)
---------- ----------
1,464,525 1,486,277
---------- ----------
$5,081,322 $4,766,847
========== ==========

See accompanying Notes to Consolidated Condensed Financial Statements.

HARRAH'S ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF INCOME

(UNAUDITED)

FIRST QUARTER ENDED
---------------------
MARCH 31, MARCH 31,
2000 1999
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) --------- ---------

Revenues
Casino.................................................... $633,757 $565,959
Food and beverage......................................... 110,268 103,153
Rooms..................................................... 64,194 62,636
Management fees........................................... 17,221 16,720
Other..................................................... 33,561 30,251
Less: casino promotional allowances....................... (75,387) (67,051)
-------- --------
Total revenues...................................... 783,614 711,668
-------- --------
Operating expenses
Direct
Casino.................................................. 334,433 301,526
Food and beverage....................................... 53,872 56,794
Rooms................................................... 16,675 17,081
Depreciation of buildings, riverboats and equipment....... 49,653 48,044
Development costs......................................... 2,159 761
Write-downs and reserves.................................. 13 123
Project opening costs..................................... 292 352
Other..................................................... 185,367 152,620
-------- --------
Total operating expenses............................ 642,464 577,301
-------- --------
Operating profit.................................. 141,150 134,367
Corporate expense......................................... (11,021) (7,931)
Headquarters relocation and reorganization costs.......... (1,796) (3,070)
Equity in losses of nonconsolidated affiliates............ (23,696) (6,668)
Venture restructuring costs............................... -- 397
Amortization of goodwill and trademarks................... (4,537) (4,612)
-------- --------
Income from operations...................................... 100,100 112,483
Interest expense, net of interest capitalized............... (50,459) (50,895)
Other income, including interest income..................... 3,616 2,166
-------- --------
Income before income taxes and minority interests........... 53,257 63,754
Provision for income taxes.................................. (18,646) (24,638)
Minority interests.......................................... (3,863) (1,771)
-------- --------
Income before extraordinary losses.......................... 30,748 37,345
Extraordinary losses, net of income tax benefit of $1,764... -- (3,248)
-------- --------
Net income.................................................. $ 30,748 $ 34,097
======== ========
Earnings per share-basic
Income before extraordinary losses........................ $ 0.25 $ 0.30
Extraordinary losses, net................................... -- (0.03)
-------- --------
Net income.............................................. $ 0.25 $ 0.27
======== ========
Earnings per share-diluted
Income before extraordinary losses........................ $ 0.25 $ 0.30
Extraordinary losses, net................................. -- (0.03)
-------- --------
Net income.............................................. $ 0.25 $ 0.27
======== ========
Average common shares outstanding........................... 121,643 125,502
======== ========
Average common and common equivalent shares outstanding..... 123,281 126,773
======== ========

See accompanying Notes to Consolidated Condensed Financial Statements.

HARRAH'S ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(UNAUDITED)

FIRST QUARTER ENDED
---------------------
MARCH 31, MARCH 31,
2000 1999
(IN THOUSANDS) --------- ---------

Cash flows from operating activities
Net income................................................ $ 30,748 $ 34,097
Adjustments to reconcile net income to cash
flows from operating activities
Extraordinary losses, before income taxes............. -- 5,012
Depreciation and amortization......................... 56,811 53,843
Other noncash items................................... 1,782 7,098
Minority interests' share of income................... 3,863 1,771
Equity in losses of nonconsolidated affiliates........ 23,696 6,667
Net losses from asset sales........................... 336 2
Net change in long-term accounts...................... 33,945 22,266
Net change in working capital accounts................ (10,316) 12,955
--------- ---------
Cash flows provided by operating activities....... 140,865 143,711
--------- ---------
Cash flows from investing activities
Payment for purchase of acquisitions, net of cash
acquired................................................ (244,001) 22,025
Land, buildings, riverboats and equipment additions....... (76,735) (85,496)
Increase in construction payables......................... 689 4,985
Investments in and advances to nonconsolidated
affiliates.............................................. (31,446) (9,077)
Proceeds from sale of Star City management contract....... 131,475 --
Proceeds from other asset sales........................... 24,619 2,614
Purchase of minority interest in subsidiary............... -- (26,000)
Other..................................................... (1,307) 11,048
--------- ---------
Cash flows used in investing activities........... (196,706) (79,901)
--------- ---------
Cash flows from financing activities
Net short-term borrowings................................. 65,000 --
Net borrowings (repayments) under Bank Facility........... 61,000 (383,567)
Early retirement of debt.................................. -- (157,072)
Scheduled debt retirements................................ (717) (2,067)
Purchases of treasury stock............................... (77,724) (3,180)
Minority interests' distributions, net of contributions... (2,473) (1,432)
Proceeds from issuance of senior notes, net of discount
and issue costs of $5,980............................... -- 494,020
Premium paid on early extinguishment of debt.............. -- (2,739)
--------- ---------
Cash flows provided by (used in) financing
activities...................................... 45,086 (56,037)
--------- ---------
Net increase in cash and cash equivalents................... (10,755) 7,773
Cash and cash equivalents, beginning of period.............. 233,581 158,995
--------- ---------
Cash and cash equivalents, end of period.................... $ 222,826 $ 166,768
========= =========

See accompanying Notes to Consolidated Condensed Financial Statements.

HARRAH'S ENTERTAINMENT, INC.

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

FIRST QUARTER ENDED
---------------------
MARCH 31, MARCH 31,
2000 1999
(IN THOUSANDS) --------- ---------

Net income.................................................. $30,748 $34,097
------- -------
Other comprehensive income
Foreign currency translation adjustments, net of tax
provision (benefit) of $56 and $(458)................... 90 (747)
Realization of foreign currency adjustments, net of tax
provision of $148....................................... 191 --
Unrealized gains on available-for-sale securities, net of
tax provision of $108 and $637.......................... 176 1,040
------- -------
Other comprehensive income............................ 457 293
------- -------
Comprehensive income........................................ $31,205 $34,390
======= =======

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

MARCH 31, 2000

(UNAUDITED)

NOTE 1--BASIS OF PRESENTATION AND ORGANIZATION

Harrah's Entertainment, Inc. ("Harrah's Entertainment", the "Company", "we",
"our" or "us", and including our subsidiaries where the context requires), a
Delaware corporation, is one of America's leading casino companies. Our casino
entertainment facilities, operating under the Harrah's, Rio, Showboat and
Players brand names, include casino hotels in Reno, Lake Tahoe, Las Vegas and
Laughlin, Nevada; two casino hotel properties in Atlantic City, New Jersey; and
riverboat and dockside casinos in Joliet and Metropolis, Illinois; East Chicago,
Indiana; Shreveport and Lake Charles, Louisiana; Tunica and Vicksburg,
Mississippi; and North Kansas City and St. Louis, Missouri. We also manage the
land based casino in New Orleans, Louisiana, and casinos on Indian lands near
Phoenix, Arizona; Cherokee, North Carolina; and Topeka, Kansas. We discontinued
management of the Star City casino in Sydney, Australia, during first quarter
2000.

NOTE 2--PLAYERS ACQUISITION

On March 22, 2000, we completed our acquisition of Players International,
Inc. ("Players"). Players operates a dockside riverboat casino on the Ohio River
in Metropolis, Illinois; two cruising riverboat casinos in Lake Charles,
Louisiana; two dockside riverboat casinos in Maryland Heights, Missouri, a
suburb of St. Louis; and a horse racetrack in Paducah, Kentucky. Players and the
Company jointly operate a landside hotel and entertainment facility at the
Maryland Heights property.

The Lake Charles and Metropolis casino operations will be converted to the
Harrah's brand name after capital improvements are completed. We are in the
process of consolidating the operations of the Players facility in Maryland
Heights with the adjacent Harrah's operation and expect to complete this
consolidation in second quarter 2000.

We paid approximately $293 million in cash and assumed $150 million in
Players' 10 7/8% Senior Notes due 2005, (the "Players' Notes"). The acquisition
was funded by our Bank Facility (see Note 4) and is being accounted for as a
purchase. The purchase price is being allocated to the underlying assets and
liabilities based upon their estimated fair values at the date of acquisition.
We are determining the estimated fair values based on independent appraisals,
discounted cash flows, quoted market prices and estimates made by management.
The allocation of the purchase price will be completed within one year from the
date of the acquisition. To the extent that the purchase price exceeds the fair
value of the net identifiable tangible assets acquired, such excess will be
allocated to goodwill and amortized over 40 years. Until we complete the
purchase price allocation our financial statements will include estimated
goodwill amortization expense.

With the assumption of the Players' Notes, we are required to abide by
covenants that, among other things, restrict the payment of dividends or the
ability to make other restricted payments, as defined, to HOC and Harrah's
Entertainment. These restricted payments include intercompany loans, advances or
other upstream payments to HOC or Harrah's Entertainment. These restrictions
should not impair our ability to conduct our business through our subsidiaries
or to pursue our development plans.

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 3--STOCKHOLDERS' EQUITY

In addition to its common stock, Harrah's Entertainment has the following
classes of stock authorized but unissued:

Preferred stock, $100 par value, 150,000 shares authorized
Special stock, $1.125 par value, 5,000,000 shares authorized--
Series A Special Stock, 2,000,000 shares designated

In July 1999, our Board of Directors authorized the repurchase in open
market and other transactions of up to 10 million shares of the Company's common
stock. We expect to acquire our shares from time to time at prevailing market
prices through the December 31, 2000, expiration of the approved plan. At March
31, 2000, we had repurchased 9.1 million shares under the provisions of this
plan.

In April 2000, our Board of Directors authorized the repurchase of an
additional 12.5 million shares of our common stock in the open market and other
transactions as market conditions warrant. This plan will expire on December 31,
2001.

NOTE 4--LONG-TERM DEBT

REVOLVING CREDIT FACILITIES

Subsequent to first quarter 2000, our revolving credit and letter of credit
facilities (collectively, the "Bank Facility") were amended to expand our
borrowing capacity from $1.6 billion to $1.9 billion. The five-year $1.3 billion
revolving credit and letter of credit facility maturing in 2004 was expanded to
$1.525 billion, and the $300 million revolving credit facility, which is
renewable annually at the borrower's and lenders' options, was expanded to $375
million. The amended Bank Facility provides the Company with increased financial
flexibility without changing any of the other terms of the agreement. After
considering the additional $300.0 million in borrowing capacity available to us
as a result of this amendment, we had $674.0 million in capacity at March 31,
2000.

Currently, the Bank Facility bears interest based upon 80 basis points over
LIBOR for current borrowings under the five-year facility and 85 basis points
over LIBOR for the 364-day facility. In addition, there is a facility fee for
borrowed and unborrowed amounts which is currently 20 basis points on the
five-year facility and 15 basis points on the 364-day facility. The interest
rate and facility fee are based on our current debt ratings and leverage ratio
and may change as our debt ratings and leverage ratio change.

SHORT-TERM BORROWING AGREEMENTS

In a program designed for short-term borrowings at lower interest rates than
the rates paid under our Bank Facility, we have entered into uncommitted line of
credit agreements with two lenders whereby we can borrow up to $65 million for
periods of ninety days or less. At March 31, 2000, we had borrowed $65 million
under these agreements. These agreements have no impact on our Bank Facility and
do not decrease our borrowing capacity under those agreements.

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 4--LONG-TERM DEBT (CONTINUED)
INTEREST RATE AGREEMENTS

To manage the relative mix of our debt between fixed and variable rate
instruments, we have entered into interest rate swap agreements to modify the
interest characteristics of our outstanding debt without an exchange of the
underlying principal amount.

During first quarter 2000, three interest rate swap agreements expired and
were not replaced with new swap agreements. We have three interest rate swap
agreements remaining which effectively convert a total of $150 million in
variable rate debt to a fixed rate. All of these swaps will expire in second
quarter 2000. Pursuant to the terms of these swaps we receive variable payments
tied to LIBOR in exchange for our payments at a fixed interest rate. The fixed
rates to be paid by us and variable rates to be received by us are summarized in
the following table:

SWAP RATE RECEIVED
SWAP RATE PAID (VARIABLE) AT SWAP
NOTIONAL AMOUNT (FIXED) MARCH 31, 2000 MATURITY
- --------------- -------------- ------------------ ---------

$50 million 6.651% 6.100% May 2000
$50 million 5.788% 6.119% June 2000
$50 million 5.785% 6.119% June 2000

The differences to be paid or received under the terms of the interest rate
swap agreements are accrued as interest rates change and recognized as an
adjustment to interest expense for the related debt. Changes in the variable
interest rates to be paid or received pursuant to the terms of our interest rate
agreements will have a corresponding effect on our future cash flows. These
agreements contain a credit risk that the counterparties may be unable to meet
the terms of the agreements. We minimize that risk by evaluating the
creditworthiness of our counterparties, which are limited to major banks and
financial institutions, and do not anticipate nonperformance by the
counterparties.

NOTE 5--SUPPLEMENTAL CASH FLOW DISCLOSURES

CASH PAID FOR INTEREST AND TAXES

The following table reconciles our interest expense, net of interest
capitalized, per the Consolidated Condensed Statements of Income, to cash paid
for interest:

THREE MONTHS ENDED
---------------------
MARCH 31, MARCH 31,
2000 1999
(IN THOUSANDS) --------- ---------

Interest expense, net of amount capitalized................. $50,459 $50,895
Adjustments to reconcile to cash paid for interest:
Net change in accruals.................................... (10,410) (14,181)
Amortization of deferred finance charges.................. (920) (2,385)
Net amortization of discounts and premiums................ (14) 591
------- -------
Cash paid for interest, net of amount capitalized........... $39,115 $34,920
======= =======
Cash payments of income taxes, net of refunds............... $ (861) $ (54)
======= =======

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 6--COMMITMENTS AND CONTINGENT LIABILITIES

NEW ORLEANS CASINO

The Company has an approximate 43% beneficial ownership interest in JCC
Holding Company and its subsidiary, Jazz Casino Company, LLC ("JCC"). JCC owns
and operates an exclusive land-based casino in New Orleans, Louisiana (the
"Casino"), which is managed by a subsidiary of the Company. The Company has (i)
guaranteed a $100.0 million annual payment obligation of JCC owed to the State
of Louisiana gaming board (the "State Obligation"), (ii) guaranteed
$166.5 million of a $236.5 million JCC bank credit facility, (iii) made
$23.9 million, as of March 31, 2000, in subordinated loans to JCC to finance
construction and completion of the Casino, and (iv) agreed to purchase, on
certain conditions, certain shares of JCC Holding Company stock owned by former
co-investors in the pre-bankruptcy predecessor of JCC for $13.5 million.

Initially, the Company guaranteed the State Obligation for the period from
October 28, 1999 to October 28, 2000 (the "Initial State Guarantee"). The
Initial State Guarantee was replaced with a new guarantee (the "Current State
Guarantee"), pursuant to which the Company has guaranteed the State Obligation
for the period from April 1, 2000 to March 31, 2001. JCC is required to make
daily payments of approximately $273,973 to satisfy the State Obligation. The
Current State Guarantee obligation is reduced to the extent JCC makes such daily
payments. Payments made to the State by the Company pursuant to the Initial
State Guarantee and the Current State Guarantee are secured by a first priority
collateral security interest in JCC's assets.

Subject to the satisfaction of certain cash flow tests and other conditions
each year, the Company is required to provide a new guarantee to the State for
each of the 12-month periods ending March 31, 2002, 2003 and 2004. For the
period ending March 31, 2002, the requirement to provide a new guarantee is
conditioned upon, among other things, JCC producing net cash flow of at least
$15 million for the 12-month period ending November 30, 2000. Based on results
to date, it appears unlikely that JCC will satisfy this cash flow test. In the
event that JCC does not in fact satisfy this cash flow test, the Company will
not be required to guarantee the State Obligation for the 12-month period ending
March 31, 2002. If in such event the Company elects not to voluntarily guarantee
the State Obligation and JCC cannot find a substitute guarantor, JCC could lose
its State gaming license.

Commencing February 28, 2000, JCC ceased making its daily payment in respect
of the State Obligation. On February 29, 2000, the State made a demand to the
Company pursuant to the Initial State Guarantee and the Company began making the
daily payment to the State on that date. The Company paid $9.6 million to the
State pursuant to the Initial State Guarantee. The Company's remaining
obligations pursuant to the Initial State Guarantee expired when the Company
provided the Current State Guarantee. The Company's obligations pursuant to the
Current State Guarantee for the 12-month period ending March 31, 2001 are
limited to $100 million. The Company commenced making payments in respect of the
State Obligation pursuant to the Current State Guarantee on April 1, 2000, which
payments totaled $11.0 million as of May 10, 2000.

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 6--COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
31, 2001, to defer the collection from JCC of amounts paid pursuant to the
Initial State Guarantee and Current State Guarantee to the extent that such
payments do not exceed $40 million in the aggregate.

Separately, the Company and certain Company affiliates have agreed, until
August 1, 2000, to defer the collection of certain fees, lease payments and
reimbursable costs arising from existing agreements with JCC. Such deferred
collections totaled approximately $10.5 as of March 31, 2000. In addition, JCC
has exercised its right, pursuant to agreements entered into at the time of its
emergence from bankruptcy in October 1998, to defer the payment of certain
management fees, credit support fees, guarantee obligations, and interest on
subordinated debt due to the Company. Such deferred payments totaled
approximately $5.7 as of March 31, 2000.

CONTRACTUAL COMMITMENTS

We continue to pursue additional casino development opportunities that may
require, individually and in the aggregate, significant commitments of capital,
up-front payments to third parties, guarantees by the Company of third party
debt and development completion guarantees. Excluding guarantees and commitments
for the New Orleans casino discussed above, as of March 31, 2000, we had
guaranteed third party loans and leases of $85.4 million, which are secured by
certain assets, and had commitments of $312.4 million for construction-related
and other obligations.

During second quarter 1999, we performed under our guarantee of the Upper
Skagit Tribe's development financing and purchased their receivable from the
lender for $11.4 million. Under the terms of our agreement with the Tribe, they
have agreed to fund the retirement of this debt. The Tribe is attempting to
secure new financing; however, there is no assurance that their efforts will be
successful and that the receivable will be collected.

The agreements under which we manage casinos on Indian lands contain
provisions required by law which provide that a minimum monthly payment be made
to the tribe. That obligation has priority over scheduled payments of borrowings
for development costs. In the event that insufficient cash flow is generated by
the operations to fund this payment, we must pay the shortfall to the tribe.
Such advances, if any, would be repaid to us in future periods in which
operations generate cash flow in excess of the required minimum payment. These
commitments will terminate upon the occurrence of certain defined events,
including termination of the management contract. As of March 31, 2000, the
aggregate monthly commitment pursuant to these contracts, which extend for
periods of up to 57 months from March 31, 2000, was $1.1 million.

SEVERANCE AGREEMENTS

As of March 31, 2000, we have severance agreements with 39 of our senior
executives, which provide for payments to the executives in the event of their
termination after a change in control, as defined. These agreements provide,
among other things, for a compensation payment of 1.5 to 3.0 times the
executive's average annual compensation, as defined, as well as for accelerated
payment or accelerated vesting of any compensation or awards payable to the
executive under any of our incentive plans. The estimated amount, computed as of
March 31, 2000, that would be payable under the

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 6--COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
agreements to these executives based on earnings and stock options aggregated
approximately $46.6 million.

TAX SHARING AGREEMENTS

In connection with the 1995 spin-off of certain hotel operations (the "PHC
Spin-off") to Promus Hotel Corporation ("PHC"), we entered into a Tax Sharing
Agreement with PHC wherein each company is obligated for those taxes associated
with their respective businesses. Additionally, we are obligated for all taxes
for periods prior to the PHC Spin-off date which are not specifically related to
PHC operations and/or PHC hotel locations. Our obligations under this agreement
are not expected to have a material adverse effect on our consolidated financial
position or results of operations.

SELF-INSURANCE

We are self-insured for various levels of general liability, workers'
compensation and employee medical coverage. We also have stop loss coverage to
protect against unexpected claims. Insurance claims and reserves include
accruals of estimated settlements for known claims, as well as accruals of
actuarial estimates of incurred but not reported claims.

NOTE 7--LITIGATION

We are involved in various inquiries, administrative proceedings and
litigation relating to contracts, sales of property and other matters arising in
the normal course of business. While any proceeding or litigation has an element
of uncertainty, we believe that the final outcome of these matters will not have
a material adverse effect upon our consolidated financial position or our
results of operations.

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 8--NONCONSOLIDATED AFFILIATES

Summarized balance sheet and income statement information of nonconsolidated
affiliates as of March 31, 2000 and December 31, 1999, and for the first
quarters ended March 31, 2000 and 1999 is included in the following tables.

MARCH 31, DEC. 31,
2000 1999
(IN THOUSANDS) --------- --------

Combined Summarized Balance Sheet Information
Current assets............................................ $ 63,330 $ 73,560
Land, buildings and equipment, net........................ 401,502 570,204
Other assets.............................................. 123,091 130,889
-------- --------
Total assets............................................ 587,923 774,653
-------- --------
Current liabilities....................................... 113,446 100,336
Long-term debt............................................ 465,977 437,756
-------- --------
Total liabilities....................................... 579,423 538,092
-------- --------
Net assets............................................ $ 8,500 $236,561
======== ========

FIRST QUARTER ENDED
---------------------
MARCH 31, MARCH 31,
2000 1999
(IN THOUSANDS) --------- ---------

Combined Summarized
Statements of Operations
Revenues................................................ $113,150 $ 88,583
======== ========
Operating loss.......................................... $(42,457) $ (3,419)
======== ========
Net loss................................................ $(53,179) $(14,290)
======== ========

Our share of nonconsolidated affiliates' combined net operating results are
reflected in the accompanying Consolidated Condensed Statements of Income as
Equity in losses of nonconsolidated affiliates.

Our investments in and advances to nonconsolidated affiliates are reflected
in the accompanying Consolidated Condensed Balance Sheets as follows:

MARCH 31, DEC. 31,
2000 1999
(IN THOUSANDS) --------- --------

Investments in and advances to nonconsolidated affiliates
Accounted for under the equity method..................... $89,151 $167,828
Accounted for at historical cost.......................... 5,000 --
Equity securities available-for-sale and recorded at
market value............................................ 967 683
------- --------
$95,118 $168,511
======= ========

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 8--NONCONSOLIDATED AFFILIATES (CONTINUED)
With the acquisition of Players in March 2000, we increased our ownership
interest in the St. Louis shoreside facilities joint venture to 100% and began
consolidating that operation with our St. Louis operations upon the closing of
the acquisition.

In accordance with the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities", we adjust the carrying value of certain marketable equity
securities to include unrealized gains and losses. A corresponding adjustment is
recorded in our stockholders' equity and deferred income tax accounts.

NOTE 9--SUMMARIZED FINANCIAL INFORMATION

Harrah's Operating Company, Inc. ("HOC") is a wholly-owned subsidiary and
the principal asset of Harrah's Entertainment. HOC is the issuer of certain debt
securities which have been guaranteed by Harrah's Entertainment. Due to the
comparability of HOC's consolidated financial information with that of Harrah's
Entertainment, complete separate financial statements and other disclosures
regarding HOC have not been presented. Management has determined that such
information is not material to holders of HOC's debt securities. Summarized
financial information of HOC as of March 31, 2000, and

HARRAH'S ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

MARCH 31, 2000

(UNAUDITED)

NOTE 9--SUMMARIZED FINANCIAL INFORMATION (CONTINUED)
December 31, 1999, and for the first quarters ended March 31, 2000 and 1999,
prepared on the same basis as Harrah's Entertainment, was as follows:

MARCH 31, DEC. 31,
2000 1999
(IN THOUSANDS) ---------- ----------

Current assets.............................................. $ 465,856 $ 481,437
Land, buildings, riverboats and equipment, net.............. 3,473,399 3,061,230
Goodwill.................................................... 674,493 505,217
Other assets................................................ 459,383 713,649
---------- ----------
5,073,131 4,761,533
---------- ----------
Current liabilities......................................... 456,533 353,534
Long-term debt.............................................. 2,755,718 2,540,268
Other liabilities........................................... 363,334 349,782
Minority interests.......................................... 20,337 18,949
---------- ----------
3,595,922 3,262,533
---------- ----------
Net assets.............................................. $1,477,209 $1,499,000
========== ==========

FIRST QUARTER ENDED
---------------------
MARCH 31, MARCH 31,
2000 1999
(IN THOUSANDS) --------- ---------

Revenues.................................................... $783,530 $711,585
======== ========
Income from operations...................................... $100,086 $112,412
======== ========
Income before extraordinary losses.......................... $ 30,739 $ 37,300
======== ========
Net income.................................................. $ 30,739 $ 34,052
======== ========

Certain of our debt guarantees contain covenants which, among other things,
place limitations on HOC's ability to pay dividends and make other restricted
payments, as defined, to Harrah's Entertainment. The amount of HOC's restricted
net assets, as defined, computed in accordance with the most restrictive of
these covenants regarding restricted payments, was approximately $1.47 billion
at March 31, 2000.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the financial position and
operating results of Harrah's Entertainment, Inc., (referred to in this
discussion, together with its consolidated subsidiaries where appropriate, as
"Harrah's Entertainment", "Company", "we", "our" and "us") for first quarter
2000 and 1999, updates, and should be read in conjunction with, Management's
Discussion and Analysis of Financial Position and Results of Operations
presented in our 1999 Annual Report.

We are the leading consumer marketing company in the gaming industry,
operating casinos in more markets than any other casino company. We seek to
differentiate ourselves through a unique strategy aimed at building loyalty to
our brands from our guests. To accomplish this objective, we focus on continued
investment and emphasis on marketing, technology and database programs, a
commitment to service and a broadened national appeal. We begin our review with
a discussion of two first quarter 2000 transactions that position our Company to
continue its progress toward achieving our strategic objectives.

PLAYERS ACQUISITION

The Lake Charles and Metropolis casino operations will be converted to the
Harrah's brand name after capital improvement projects are completed. We are in
the process of consolidating the operations of the Players facility in Maryland
Heights with the adjacent Harrah's operation and expect to complete this
consolidation in second quarter 2000.

We paid approximately $293 million in cash and assumed $150 million in
Players' 10 7/8% Senior Notes due 2005, (the "Players' Notes"). The acquisition
was funded by our Bank Facility (see Debt & Liquidity section) and is being
accounted for as a purchase. The purchase price is being allocated to the
underlying assets and liabilities based upon their estimated fair values at the
date of acquisition. We are determining the estimated fair values based on
independent appraisals, discounted cash flows, quoted market prices and
estimates made by management. The allocation of the purchase price will be
completed within one year from the date of the acquisition. To the extent that
the purchase price exceeds the fair value of the net identifiable tangible
assets acquired, such excess will be allocated to goodwill and amortized over 40
years. Until we complete the purchase price allocation, our financial statements
will include estimated goodwill amortization expense.

RINCON DEVELOPMENT

During first quarter 2000, we signed a definitive agreement with the Rincon
San Luiseno Band of Mission Indians to build and manage a $110 million casino
and hotel on Rincon tribal land 25 miles north of San Diego. This location
provides convenient access to metropolitan San Diego, La Jolla, Del Mar,
Escondido and Orange County, California.

The Tribe expects to begin operations of a temporary casino in fourth
quarter 2000. We have committed to provide up to $14.6 million to finance this
development and to provide the Tribe technical service related to the
development and operation of the temporary casino, but we will not manage the
temporary facility. The permanent facility, the cost of which is to be funded by
a third-party loan that we expect to guarantee, is expected to open in fourth
quarter 2001. We will manage the

permanent facility for a fee. The operation of the temporary casino and the
permanent casino project are subject to various approvals, including approvals
of the National Indian Gaming Commission.

OPERATING RESULTS AND DEVELOPMENT PLANS

OVERALL

First quarter 2000 revenues increased 10.1% over first quarter 1999,
however, net income declined 9.8% from the same period last year. The primary
factors contributing to the decline in net income were low table games hold
percentage at the Rio Hotel & Casino ("Rio") in Las Vegas, Nevada, and our pro
rata share of operating losses at our 43 percent-owned Harrah's New Orleans
casino, which opened last October, and at our 48 percent-owned National
Airlines, Inc. ("NAI"), which began operations in May 1999.

First quarter gaming revenues at owned and managed properties, which were in
our system during first quarter 2000 and first quarter 1999, grew 11.7% over the
same period last year. Excluding properties acquired or opened since June 1998,
company-owned and managed properties generated same-store gaming revenue growth
of 15.6% over first quarter 1999.

Operating results for first quarter 2000 include ten days of operations for
the properties acquired in the Players acquisition, which were not material to
our overall operating results.

WESTERN REGION

FIRST QUARTER PERCENTAGE
------------------- INCREASE/
2000 1999 (DECREASE)
(IN MILLIONS) -------- -------- ----------

Casino revenues................................... $171.9 $177.0 (2.9)%
Total revenues.................................... 275.3 282.4 (2.5)%
Operating profit.................................. 23.7 44.9 (47.2)%
Operating margin.................................. 8.6% 15.9% (7.3)pts

The declines in first quarter 2000 revenues and operating income from the
same period last year were primarily due to well-below-average table games hold
percentage at the Rio, where first quarter revenues were 11.9% below first
quarter 1999 and an operating loss of $1.3 million was reported compared to
operating income of $22.2 million for the same period last year. In addition to
the revenue shortfalls, operating margin at the Rio declined due to the
increased marketing and promotional costs incurred by the property in an effort
to maintain its competitive position in the market following the opening of
several competitors over the last 18 months. First quarter revenues at our
southern Nevada Harrah's properties increased 7.2%, operating income increased
9.8% and operating margin increased 0.4 points over the same period last year.
Revenues at our northern Nevada properties were basically flat compared to first
quarter 1999, due primarily to renovation disruptions at Harrah's Lake Tahoe,
however, operating income was 11.7% higher than during the same period last year
due to successful marketing programs and cost savings efforts at Harrah's Reno.

Subsequent to first quarter, Rio opened its new showroom complex which
includes a 1,500 seat, state-of-the-art theater with balcony; a three-level
lobby with hospitality center; and a theater promenade with approximately 10,000
square feet of retail space. The showroom complex is located adjacent to the
Pavilion, Rio's 110,000 square foot entertainment/convention complex, which
opened in March 1999. The showroom complex is expected to cost approximately $35
million, of which $30.2 million had been spent through March 31, 2000.

During first quarter 2000, we completed the sale for cash of the Showboat
Las Vegas property, which was acquired in our June 1998 acquisition of Showboat,
Inc. No gain or loss resulted from the sale of this nonstrategic asset.

EASTERN REGION

FIRST QUARTER PERCENTAGE
------------------- INCREASE/
2000 1999 (DECREASE)
(IN MILLIONS) -------- -------- ----------

Casino revenues................................... $174.3 $167.9 3.8%
Total revenues.................................... 185.4 179.0 3.6%
Operating profit.................................. 38.1 36.1 5.5%
Operating margin.................................. 20.6% 20.2% 0.4pts

Harrah's Atlantic City's revenues increased 8.3% in first quarter 2000 and
operating profit increased 30.3% over the same period last year. While Showboat
Atlantic City's revenues were basically flat compared to first quarter 1999,
operating income declined 19.5% due to increased marketing and promotional costs
incurred in an effort to maintain the property's competitive position in the
market. We believe that the above-market growth achieved by Harrah's Atlantic
City is due to the successful execution by the property of strategic marketing
programs utilizing the available technological tools offered by our WINet
customer database and Total Rewards program. Showboat Atlantic City is scheduled
to be fully integrated into the WINet and Total Rewards program later this year.

In April 2000, we announced plans for a 450-room expansion at Harrah's
Atlantic City, increasing the hotel's capacity to more that 1,600 rooms. The
expansion is expected to cost approximately
$110 million and is scheduled to be completed in first quarter 2002. The
expansion is subject to regulatory approvals.

CENTRAL REGION

FIRST QUARTER PERCENTAGE
------------------- INCREASE/
2000 1999 (DECREASE)
(IN MILLIONS) -------- -------- ----------

Casino revenues................................... $287.6 $221.1 30.1%
Total revenues.................................... 301.5 233.0 29.4%
Operating profit.................................. 68.9 41.2 67.2%
Operating margin.................................. 22.9% 17.7% 5.2pts

Chicagoland--Revenues increased 60.1% at Harrah's Joliet compared to first
quarter 1999 and operating profit increased 120.5% compared to the same period
last year. These results are attributable to the mid-1999 elimination of cruise
scheduling and ticketing and the fourth quarter opening of the new hotel at this
property. Harrah's East Chicago revenues increased 40.0% over first quarter
1999, and operating income increased 144.0%. We believe that these results were
driven by the March 1999 re-branding of this property to the Harrah's brand and
the successful execution of the Company's loyalty strategy in East Chicago.

Louisiana--Harrah's Shreveport's revenues were basically the same compared
to first quarter 1999, but operating profit declined due to costs of promotions
mounted to sustain business during construction activities. Construction began
in May 1999 on a 514-room hotel with almost 18,000 square feet of convention
center space. The new hotel and amenity expansion is expected to cost
$146.6 million, of which $41.6 million had been spent through March 31, 2000.
The expansion is scheduled to open in fourth quarter 2000.

Mississippi--Combined first quarter revenues by our Mississippi properties
increased 9.1% over first quarter 1999. Increases in operating profit at
Harrah's Tunica offset declines at Harrah's Vicksburg, for a net increase in
operating profit at our Mississippi properties of 15.5% over first quarter 1999.

Missouri--First quarter revenues at our Missouri properties increased 14.7%
and operating profit increased 45.3% over the same period in 1999. Revenue
increases are primarily attributable to Harrah's St. Louis, where revenues were
35.4% higher than in first quarter last year. Harrah's St. Louis and Harrah's
North Kansas City increased operating profit 70.0% and 27.9%, respectively, over
the same period last year. The Missouri properties' revenues have benefited from
the elimination in third and fourth quarters of 1999 of restricted boarding
schedules, but operating profit was affected by higher admission taxes.

The St. Louis shoreside facilities were owned jointly with Players prior to
our March 22, 2000, acquisition of that company. Our pro rata share of the
operating losses of the joint venture through the date of the Players
acquisition was $2.4 million for first quarter 2000. These losses are included
in Equity in losses of nonconsolidated affiliates in the Consolidated Condensed
Statements of Income (see Other Factors Affecting Net Income). Subsequent to the
Players acquisition, results of the shoreside facilities, as well as for Players
St. Louis operations, are combined with Harrah's St. Louis' operating results.

In May 2000, we announced plans for facilities enhancements to Harrah's
North Kansas City, including approximately 28,000 square feet of additional
gaming space. The enhancements are expected to cost approximately $40.1 million
and are expected to be completed in second quarter 2001. The expansion is
subject to regulatory approvals.

MANAGED AND OTHER CASINOS

Increases in our managed and other results were led by the addition of fees
from Harrah's New Orleans, which opened in fourth quarter 1999. Management fees
from Indian-owned casinos declined slightly from first quarter last year due to
the impact on our management fee percentages of recent renewal and extension
agreements for two of these facilities.

See DEBT and LIQUIDITY section for further discussion of Harrah's guarantees
of debt related to Indian projects.

We ceased management of the Star City casino in Sydney, Australia, in
January 2000, upon the completion of the buy-out of our management contract by
another company. No material gain or loss was recognized on the sale of this
management contract.

OTHER FACTORS AFFECTING NET INCOME

FIRST QUARTER PERCENTAGE
--------------------- INCREASE/
2000 1999 (DECREASE)
(IN MILLIONS) -------- -------- ----------

(Income)/Expense
Development costs........................................... $ 2.2 $ 0.8 N/M
Project opening costs....................................... 0.3 0.4 (25.0)%
Corporate expense........................................... 11.0 7.9 39.2 %
Headquarters relocation expense............................. 1.8 3.1 (41.9)%
Equity in losses of nonconsolidated affiliates.............. 23.7 6.7 N/M
Write-downs, reserves and recoveries........................ -- 0.1 N/M
Venture restructuring costs................................. -- (0.4) N/M
Amortization of goodwill and trademarks..................... 4.5 4.6 (2.2)%
Interest expense, net....................................... 50.5 50.9 (0.8)%
Other income................................................ (3.6) (2.2) 63.6 %
Effective tax rate.......................................... 35.0% 38.6% (3.6)pts
Minority interests.......................................... $ 3.9 $ 1.8 N/M
Extraordinary losses, net of income taxes................... -- 3.2 N/M

Development costs for first quarter 2000 increased from the same period last
year. However, development activities were limited in both periods due to the
limited number of new markets opening for development.

Corporate expense increased 39.2% in first quarter 2000 from the prior year
level due to timing of certain expenses and increases in other costs. Costs
related to the relocation of the Company's headquarters to Las Vegas, Nevada,
declined 41.9% from first quarter 1999, as relocation activity began to subside.

The increase in Equity in losses of nonconsolidated affiliates reflects the
increase in losses from Harrah's New Orleans and NAI, both of which began
operations subsequent to first quarter 1999. Equity in losses of nonconsolidated
affiliates also includes our pro rata share of the losses from the St. Louis
shoreside facilities through the date of the Players acquisition.

Amortization of goodwill decreased slightly from the same period last year
due to the use of estimates for goodwill amortization during first quarter last
year. Goodwill based on the final purchase price allocations completed
subsequent to first quarter 1999 for Showboat and Rio was slightly less than
estimated amounts.

Interest expense decreased in first quarter 2000 from 1999, primarily due to
replacement of the debt assumed in connection with the acquisitions of Rio and
East Chicago with lower-rate borrowings from our Bank Facility.

Other income increased in first quarter 2000 due to higher income earned on
the cash surrender value of company owned life insurance policies.

The effective tax rates for both periods are higher than the federal
statutory rate primarily due to state income taxes.

Minority interests reflects joint venture partners' share of income which
increased in 2000 from the prior year as a result of higher earnings from those
ventures.

The extraordinary losses reported in 1999 were due to the early
extinguishment(s) of debt and include premiums paid to the holders of the debt
retired and the write-off of related unamortized deferred finance charges. (See
Debt and Liquidity--Extinguishment of Debt.)

CAPITAL SPENDING AND DEVELOPMENT

In addition to the specific development and expansion projects discussed in
the Operating Results and Development Plans section, we perform on-going
refurbishment and maintenance at our casino entertainment facilities in order to
maintain the Company's quality standards. We also continue to pursue development
and acquisition opportunities for additional casino entertainment facilities
that meet our strategic and return on investment criteria. Prior to the receipt
of necessary regulatory approvals, the costs of pursuing development projects
are expensed as incurred. Construction-related costs incurred after the receipt
of necessary approvals are capitalized and depreciated over the estimated useful
life of the resulting asset. Project opening costs are expensed as incurred.

Our planned development projects, if they go forward, will require,
individually and in the aggregate, significant capital commitments and, if
completed, may result in significant additional revenues. The commitment of
capital, the timing of completion and the commencement of operations of casino
entertainment development projects are contingent upon, among other things,
negotiation of final agreements and receipt of approvals from the appropriate
political and regulatory bodies. Cash needed to finance projects currently under
development as well as additional projects pursued is expected to be made
available from operating cash flows, bank borrowings (see Debt and Liquidity
section), joint venture partners, specific project financing, guarantees of
third party debt and, if necessary, additional debt and/or equity offerings. Our
capital spending for the first three months of 2000 totaled approximately $109.5
million. Estimated total capital expenditures for 2000 are expected to be
between $370 million and $470 million, excluding the acquisition of Players.

DEBT AND LIQUIDITY

BANK FACILITY

SHORT-TERM BORROWINGS

INTEREST RATE AGREEMENTS

To manage the relative mix of our debt between fixed and variable rate
instruments, we entered into interest rate swap agreements to modify the
interest characteristics of our outstanding debt without an exchange of the
underlying principal amount. The differences to be paid or received under the
terms of our interest rate swap agreements are accrued as interest rates change
and recognized as an adjustment to interest expense for the related debt.
Changes in the variable interest rates to be paid or received pursuant to the
terms of our interest rate swap agreements will have a corresponding effect on
our future cash flows.

These agreements contain a credit risk that the counterparties may be unable
to meet the terms of the agreements. We minimize that risk by evaluating the
creditworthiness of our counterparties, which are limited to major banks and
financial institutions, and do not anticipate nonperformance by the
counterparties.

As of March 31, 2000, we were a party to three interest rate swaps for a
total notional amount of $150 million. All of these swaps will expire in second
quarter 2000, and we do not expect to enter into new swap agreements. For more
information regarding the Company's interest rate swap agreements as of March
31, 2000, please see Note 4 to the accompanying Consolidated Condensed Financial
Statements.

GUARANTEES OF THIRD PARTY DEBT AND OTHER COMMITMENTS

loans to JCC to finance construction and completion of the Casino, and
(iv) agreed to purchase, on certain conditions, certain shares of JCC Holding
Company stock owned by former co-investors in the pre-bankruptcy predecessor of
JCC for $13.5 million.

Subject to certain conditions, which are presently being satisfied, JCC's
bank credit facility permits the Company to pay up to an aggregate of $40
million pursuant to the Initial State Guarantee and Current State Guarantee
without a default under that facility. The Company has agreed until March 31,
2001, to defer the collection from JCC of amounts paid pursuant to the Initial
State Guarantee and Current State Guarantee to the extent that such payments do
not exceed $40 million in the aggregate.

The agreements under which we manage casinos on Indian lands contain
provisions required by law which provide that a minimum monthly payment be made
to the tribe. That obligation has priority over scheduled repayments of
borrowings for development costs. In the event that insufficient cash flow is
generated by the operations to fund this payment, we must pay the shortfall to
the tribe. Such advances, if any, would be repaid to us in future periods in
which operations generate cash flow in excess of the required minimum payment.
These commitments will terminate upon the occurrence of certain defined events,
including termination of the management contract. Our aggregate monthly

commitment pursuant to the contracts for the three Indian-owned facilities now
open, which extend for periods of up to 57 months from March 31, 2000, is $1.1
million.

We may guarantee all or part of the debt incurred by Indian tribes with
which we have entered a management contract to fund development of casinos on
the Indian lands. For all existing guarantees of Indian debt, we have obtained a
first lien on certain personal property (tangible and intangible) of the casino
enterprise. There can be no assurance, however, the value of such property would
satisfy our obligations in the event these guarantees were enforced.
Additionally, we have received limited waivers from the Indian tribes of their
sovereign immunity to allow us to pursue our rights under the contracts between
the parties and to enforce collection efforts as to any assets in which a
security interest is taken. The aggregate outstanding balance of such debt as of
March 31, 2000, was $69.8 million.

We have agreed to provide up to $10 million in loans to NAI, $5 million of
which had been advanced at March 31, 2000. In addition, we have provided letters
of credit on behalf of NAI totaling $17 million dollars. $12 million in letters
of credit serve as collateral to credit card processors in order to enable NAI
to receive proceeds from the credit card processors for advance ticket sales.
The remaining $5 million serves as collateral to enable NAI to secure space in
airport terminals. Subsequent to first quarter, we entered into an agreement
with another investor of NAI whereby that investor will reimburse to us fifty
percent of any amount that we might pay in response to demands on the letters of
credit.

EFFECTS OF CURRENT ECONOMIC AND POLITICAL CONDITIONS

COMPETITIVE PRESSURES

Due to the limited number of new markets opening for development, many
casino operators are investing in existing markets in an effort to attract new
customers, thereby increasing competition in those markets. With the exception
of the additional supply being added in Las Vegas, the amount of supply change
in the long-established gaming markets of Nevada and New Jersey has represented
a smaller percentage change than that experienced in some riverboat markets. In
riverboat markets, the additions to supply had a more noticeable impact, due to
the fact that competition was limited in the early stages of many of these
markets. As companies have completed expansion projects, supply has typically
grown at a faster pace than demand in some markets and competition has increased
significantly. Furthermore, several operators, including Harrah's, have
announced plans for additional developments or expansions in some markets. In
the Las Vegas market, four new "mega" facilities have opened since October 1998,
and others are planned and under development. The impact that the additional
supply will have on our operations cannot be determined at this time.

Although the short-term effect of these competitive developments on the
Company has been negative, we are not able to determine the long-term impact,
whether favorable or unfavorable, that these trends and events will have on our
current or future markets. We believe that the geographic diversity of our
operations; our focus on multi-market customer relationships; our service
training, measurements and rewards programs; and our continuing efforts to
establish our brands as premier brands have well-positioned us to face the
challenges present within the industry. In 1997, we introduced WINet, a
sophisticated nationwide customer database, and our Total Gold Card, a
nationwide reward and recognition card, both of which we believe provide
competitive advantages, particularly with players who visit more than one
market. During 1999, we implemented the next stage of our strategy with the
launch of the tiered customer loyalty card program - Total Diamond, Total
Platinum and Total Gold - to reward customers for choosing Harrah's
entertainment casinos. Subsequent to first quarter 2000, we launched our new
customer loyalty program - Total Rewards - which offers significant enhancements
to Total Gold and provides our customers with a simpler understanding of exactly
how to earn the cash, comps and other benefits they want. The Rio and Showboat
properties are expected to be integrated into the Total Rewards program during
2000.

INDUSTRY CONSOLIDATION

As evidenced by the number of recent public announcements by casino
entertainment companies of plans to acquire or be acquired by other companies,
including our acquisitions of Showboat, Rio and Players, consolidation in the
gaming industry continues. We believe we are well-positioned to, and may from
time to time, pursue additional strategic acquisitions to further enhance our
distribution, strengthen our access to target customers and leverage our
technological and centralized services infrastructure.

POLITICAL UNCERTAINTIES

The casino entertainment industry is subject to political and regulatory
uncertainty. In 1996, the U.S. government formed a federal commission to study
gambling in the United States, including the casino gaming industry. The
commission issued its report in June 1999. In September 1999, the State of
California and approximately 60 Indian tribes executed Class III Gaming
Compacts, which other California tribes can join. The Compacts, when effective,
will allow each tribe to operate, on tribal trust lands, two casinos with up to
2,000 slot machines per tribe and unlimited house-banked card games. At this
time, the ultimate impacts that the National Gaming Impact Study Commission
report and the California Compacts may have on the industry or on our Company
are uncertain. From time to time, individual jurisdictions have also considered
legislation or referendums which could adversely impact our operations, and the
likelihood or outcome of similar legislation and referendums in the future is
difficult to predict.

The casino entertainment industry represents a significant source of tax
revenues to the various jurisdictions in which casinos operate. From time to
time, various state and federal legislators and officials have proposed changes
in tax laws, or in the administration of such laws, which would affect the
industry. It is not possible to determine with certainty the scope or likelihood
of possible future changes in tax laws or in the administration of such laws. If
adopted, such changes could have a material adverse effect on our financial
results.

INTERCOMPANY DIVIDEND RESTRICTIONS

Certain of our debt guarantees require us to abide by covenants which, among
other things, limit HOC's ability to pay dividends and make other restricted
payments, as defined, to Harrah's Entertainment. The amount of HOC's restricted
net assets, as defined, computed in accordance with these covenants regarding
restricted payments was approximately $1.47 billion at March 31, 2000. Harrah's
Entertainment's principal asset is the stock of HOC, a wholly-owned subsidiary
which holds, directly and through subsidiaries, the principal assets of our
businesses. Given this ownership structure, these restrictions should not impair
our ability to conduct our business through our subsidiaries or to pursue our
development plans.

PRIVATE SECURITIES LITIGATION REFORM ACT

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Form 10-Q and other materials filed or to be filed by the Company with the
Securities and Exchange Commission ("SEC") (as well as information included in
oral statements or other written statements made or to be made by the Company)
contains statements that are forward looking. These include statements relating
to the following activities,

among others: (A) operations and expansions of existing properties, including
future performance, anticipated scope and opening dates of expansions;
(B) planned development of casinos and hotels that would be owned or managed by
the Company and the pursuit of strategic acquisitions; (C) planned capital
expenditures for 2000 and beyond; (D) the impact of the WINet, Total Gold Card
and Total Rewards Programs; and (E) any future impact of the Showboat or Players
acquisitions, the Rio merger or the Rincon development. These activities involve
important factors that could cause actual results to differ materially from
those expressed in any forward looking statements made by or on behalf of the
Company. These include, but are not limited to, the following factors as well as
other factors described from time to time in the Company's reports filed with
the SEC: construction factors, including zoning issues, environmental
restrictions, soil conditions, weather and other hazards, site access matters
and building permit issues; access to available and feasible financing;
regulatory, licensing and other government approvals, third party consents and
approvals, and relations with partners, owners and other third parties;
conditions of credit markets and other business and economic conditions,
including international and national economic problems; litigation, judicial
actions and political uncertainties, including gaming legislative action,
referenda, and taxation; and the effects of competition including locations of
competitors and operating and marketing competition. Any forward-looking
statements are made pursuant to the Private Securities Litigation Reform Act of
1995 and, as such, speak only as of the date made.

PART II--OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

*EX-4.1 Letter from Harrah's Entertainment, Inc. and Harrah's
Operating Company, Inc. to JCC Holding Company, dated
February 29, 2000, regarding Minimum Payment Guaranty.

*EX-4.2 Unconditional Minimum Payment Guaranty Agreement for Fiscal
Year ending March 31, 2001 by Harrah's Entertainment, Inc.
and Harrah's Operating Company, Inc. in favor of the State
of Louisiana by and through the Louisiana Gaming Control
Board, dated March 31, 2000.

*EX-10.1 Harrah's Entertainment, Inc.'s Restated Annual Management
Bonus Plan dated February 2000.

*EX-11 Computation of per share earnings.

*EX-27 Financial Data Schedule.

EX-99.1 Press Release dated March 22, 2000--Harrah's Entertainment
Completes Acquisition of Players International (Incorporated
by reference from the Company's Current Report on Form 8-K,
filed April 4, 2000, File No. 1-10410).

EX-99.2 Press Release dated April 13, 2000--Harrah's Estimates
First-Quarter Earnings at 24 to 26 Cents Per Share; Low Hold
Percentage at Rio Impacted Per-Share Earning by 9 Cents
(Incorporated by reference from the Company's Current Report
on Form 8-K, filed April 17, 2000, File No.1-10410).

- ------------------------

* Filed herewith.

(b) A Form 8-K was filed by the Company on April 4, 2000, reporting the
completion of the acquisition of Players International, Inc. A Form 8-K was
filed by the Company on April 17, 2000, reporting the estimates of first-quarter
earnings.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

HARRAH'S ENTERTAINMENT, INC.

May 12, 2000 BY: /s/ JUDY T. WORMSER
-----------------------------------------
Judy T. Wormser
VICE PRESIDENT AND CONTROLLER
(CHIEF ACCOUNTING OFFICER)

EXHIBIT INDEX

SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ------------------------------------------------------------ ----------

*EX-4.1 Letter from Harrah's Entertainment, Inc. and Harrah's
Operating Company, Inc. to JCC Holding Company, dated
February 29, 2000, regarding Minimum Payment Guaranty.
*EX-4.2 Unconditional Minimum Payment Guaranty Agreement for Fiscal
Year ending March 31, 2001 by Harrah's Entertainment, Inc.
and Harrah's Operating Company, Inc. in favor of the State
of Louisiana by and through the Louisiana Gaming Control
Board, dated March 31, 2000.
*EX-10.1 Harrah's Entertainment, Inc.'s Restated Annual Management
Bonus Plan dated February 2000.
*EX-11 Computation of per share earnings.
*EX-27 Financial Data Schedule.
EX-99.1 Press Release dated March 22, 2000--Harrah's Entertainment
Completes Acquisition of Players International (Incorporated
by reference from the Company's Current Report on Form 8-K,
filed April 4, 2000, File No.1-10410).
EX-99.2 Press Release dated April 13, 2000--Harrah's Estimates
First-Quarter Earnings at 24 to 26 Cents Per Share; Low Hold
Percentage at Rio Impacted Per-Share Earning by 9 Cents
(Incorporated by reference from the Company's Current Report
on Form 8-K, filed April 17, 2000, File No.1-10410).