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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

Commission File No. 1-10410

HARRAH'S ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

None

        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 ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

        The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of January 31, 2003, based upon the closing price of $36.28 for the Common Stock on the New York Stock Exchange on that date, was $3,856,458,715.

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý    No o

        As of January 31, 2003, the Registrant had 109,880,622 shares of Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

        Portions of the definitive Proxy Statement for the 2003 Annual Meeting of Stockholders, which will be filed within 120 days after the end of the fiscal year, are incorporated by reference into Part III hereof and portions of the Company's Annual Report to Stockholders for the year ended December 31, 2002 (the "Annual Report") are incorporated by reference into Parts I and II hereof.

PART I

ITEMS 1 and 2. Business and Properties.

        Harrah's Entertainment, Inc., a Delaware corporation, operates 26 casinos in 13 states. We conduct our business through a wholly owned subsidiary, Harrah's Operating Company, Inc. ("HOC"), and through HOC's subsidiaries. Our principal asset is the stock of HOC, which holds, directly or indirectly through subsidiaries, substantially all of the assets of our businesses. We were incorporated on November 2, 1989, and prior to such date operated under predecessor companies. Our principal executive offices are located at One Harrah's Court, Las Vegas, Nevada 89119, telephone (702) 407-6000.

        In June 2002, we acquired additional common shares of JCC Holding Company, which, together with its subsidiary, Jazz Casino Company LLC (collectively, "JCC"), owns and operates the Harrah's casino in New Orleans, Louisiana. This acquisition increased our ownership from 49% to 63%. In December 2002, we acquired the remaining shares of JCC common stock to increase our ownership to 100%. In the aggregate, we acquired the additional ownership interest in JCC for a total of $72.4 million ($10.54 per share), in addition to which we acquired approximately $45.8 million of JCC's debt, assumed approximately $28.2 million of JCC's Senior Notes, which we subsequently retired, and incurred approximately $1.9 million of acquisition costs. We financed the acquisition and retired JCC's debt with funds from various sources, including cash flows from operations and borrowings under the Company's established debt programs.

        In August 2002 we opened Harrah's Rincon Casino and Resort, owned by the Rincon San Luiseno Band of Mission Indians ("Rincon") in Southern California.

        With our acquisition of Harveys in 2001, we assumed a $50 million contingent liability, which was dependent on the results of a referendum that was decided by the voters in Pottawattamie County, Iowa, in November 2002. The referendum, which re-approved gaming at racetracks and on riverboats for another eight years, passed and we paid an additional $50 million in acquisition costs in fourth quarter 2002.

        In December 2002, we acquired a controlling interest in Louisiana Downs, a thoroughbred racetrack in Bossier City, Louisiana. The agreement gives Harrah's a 95% ownership interest in a company that now owns both Louisiana Downs and Harrah's Shreveport. We plan to install slot machines at the racetrack and expand and renovate the entertainment facility, which will be the only land-based gaming facility in northern Louisiana. Plans call for Louisiana Downs to offer approximately 900 slot machines by the time racing season begins in June 2003, approval for which was granted by the Louisiana Gaming Control Board in February 2003. We expect to open a new permanent facility with approximately 1,500 slot machines by June 2004. We paid approximately $81.6 million, including $29.3 million in short-term notes that were paid in full in January 2003 and $6.0 million in equity interest in Harrah's Shreveport, for the interest in Louisiana Downs and approximately $0.1 million of acquisition costs. The purchase price allocation of this acquisition has not been completed, and we may adjust amounts allocated to the various components of this transaction when completed.

        Information concerning the status of expansions and improvements in our other properties during 2002 is set forth below under the heading "Casino Entertainment" where specific properties are discussed.

        Operating data for the three most recent fiscal years is set forth on page 16 of the Annual Report. This information is incorporated into this document by reference.

        For information on operating results and a discussion of those results, see "Management's Discussion and Analysis—Operating Results and Development Plans" on pages 17 through 32 of the Annual Report, which information is incorporated into this document by reference.

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        This Annual Report on Form 10-K includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contains words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue" or "pursue," or the negative or other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, future actions, new projects, strategies, future performance, the outcome of contingencies such as legal proceedings and future financial results. We have based these forward-looking statements on our current expectations and projections about future events.

        We caution the reader that forward-looking statements involve risks and uncertainties that cannot be predicted or quantified and, consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors as well as other factors described from time to time in our reports filed with the Securities and Exchange Commission:

•

the effect of economic, credit and capital market conditions on the economy in general, and on gaming and hotel companies in particular;



•

construction factors, including delays, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters and building permit issues;



•

the effects of environmental and structural building conditions relating to our properties;



•

our ability to timely and cost effectively integrate into our operations the companies that we acquire;



•

access to available and feasible financing;



•

changes in laws (including increased tax rates), regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies;



•

litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation;



•

ability of our customer-tracking and yield-management programs to continue to increase customer loyalty;



•

our ability to recoup costs of capital investments through higher revenues;



•

acts of war or terrorist incidents;



•

abnormal gaming holds; and



•

the effects of competition, including locations of competitors and operating and market 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. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Available Information

        Our Internet address is www.harrahs.com. We make available free of charge on or through our Internet website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission.

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CASINO ENTERTAINMENT

General

        Our casino business commenced operations in 1937. As of December 31, 2002, we owned and/or operated a total of approximately 1,547,645 square feet of casino space, 42,585 slot machines, 1,167 table games, 14,431 hotel rooms or suites, approximately 365,422 square feet of convention space, and 108 restaurants.

Summary of Property Information*

*

As of December 31, 2002.

(1)

Approximate.

(2)

Includes owned facilities and those operated by third parties.

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(3)

Owned, leased or occupied by agreement.

(4)

Construction is under way on a 544-room hotel tower, which is expected to open in the second quarter of 2003.

(5)

We have entered into an agreement to sell Harveys Central City. Closing is subject to customary regulatory approvals and is expected in the first half of 2003.

(6)

A hotel is adjacent to the Metropolis facility in which the Company owns a 12.5% special limited partnership interest.

(7)

Harrah's New Orleans is owned and operated by JCC and managed by a Harrah's subsidiary. In December 2002, we acquired additional shares of JCC common stock to increase our ownership to 100%.

(8)

Managed.

(9)

The property is owned by the Company, leased to the operator, and managed by the Company for the operator for a fee pursuant to an agreement that expires in October 2024.

OWNED CASINOS

Atlantic City, New Jersey

        Harrah's Atlantic City is situated in the Marina area of Atlantic City. It consists of four hotel towers (three 16-story and one 24-story) and adjoining low-rise buildings that house the casino space and the convention center. The facilities include an 800-seat showroom and a health club with a swimming pool. We also own 174 acres of predominantly wetlands in the Brigantine area and parcels totaling approximately 6.2 acres in Atlantic City outside the Marina area. Construction was completed in 2002 on an expansion of the casino floor space and a buffet area, at an estimated cost of $180 million.

        The Mardi Gras-themed Atlantic City Showboat is located on the Boardwalk in Atlantic City. Construction is under way on a new 544-room hotel tower at the Showboat, which is expected to be completed in the second quarter of 2003 at an approximate cost of $90 million.

        Most of Harrah's Atlantic City's and Atlantic City Showboat's customers arrive by car or bus from within a 150-mile radius, which includes Philadelphia, New York and northern New Jersey, the casinos' primary feeder markets.

Las Vegas, Nevada

        Harrah's Las Vegas is located on the Las Vegas Strip and consists of a 15-floor hotel tower, a 23-floor hotel tower, two 35-floor hotel towers, and adjacent low-rise buildings. Also included are the 543-seat Commander's Theatre, a 365-seat cabaret, an arcade, a health club and a heated pool.

        The Rio All-Suite Hotel & Casino is situated adjacent to Interstate 15 near the heart of the Las Vegas Strip. The carnival and Mardi Gras-themed hotel and casino has three interconnected 21-story "Ipanema Towers," a 42-story "Masquerade Tower" and nine luxury Palazzo Suites in a complex adjoining the casino. In addition, the facility contains a 2,995-seat entertainment complex, a 53,000 square foot shopping area, and a 152,600 square foot outdoor entertainment area featuring a landscaped sand beach and three swimming pools. Rio also owns the Rio Secco Golf Club in nearby Henderson, Nevada, and approximately 30 acres of undeveloped land adjacent to and across Twain Avenue from the casino.

        Rio also has a showroom complex that includes a 1,500-seat, state-of-the-art theater with a balcony, a three-level lobby with hospitality center, and a theater promenade. The showroom complex

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is located adjacent to the Pavilion, which is Rio's 110,000 square foot entertainment/convention complex.

        The primary feeder markets for Harrah's Las Vegas are the Midwest, California and Canada. For Rio, the primary feeder market is Southern California.

Lake Tahoe, Nevada

        Harrah's Lake Tahoe is situated near Lake Tahoe and consists of an 18-story tower and adjoining low-rise building. The casino hotel includes the 800-seat South Shore Showroom, a 50-seat cabaret, a health club, retail shops and a heated pool.

        Harveys Resort & Casino is also located near Lake Tahoe. The facility includes two towers (17-story and 12-story) and adjoining buildings. The resort has a 250-seat showroom, a wedding chapel, retail shops, a pool, and an arcade.

        We also own and operate Bill's Casino, which is located immediately adjacent to Harrah's Lake Tahoe.

        The primary feeder market for these casinos is California.

Reno, Nevada

        Harrah's Reno, located in downtown Reno, consists of a casino hotel complex with a 24-story two-tower structure. The facilities include the 420-seat Sammy's Showroom, a pool, a health club and an arcade.

        The primary feeder markets for Harrah's Reno are Northern California, the Pacific Northwest and Canada.

Laughlin, Nevada

        Harrah's Laughlin is located adjacent to a natural cove on the Colorado River and features a 378-seat showroom and a 3,000-seat outdoor amphitheater. Other amenities include a park for recreational vehicles, a health club, swimming pools, an arcade and retail shops. It is the only property in Laughlin with a developed beachfront on the River.

        The casino's primary feeder markets are the Los Angeles and Phoenix metropolitan areas.

Central City, Colorado

        Harveys Wagon Wheel is situated in Central City approximately 35 miles west of Denver. Additionally, we own approximately 40 acres of undeveloped land adjacent to the facility.

        We have entered into an agreement to sell Harveys Central City. Closing is subject to customary regulatory approvals and is expected in the second quarter of 2003.

        The primary feeder market for the casino is the Denver metropolitan area.

Joliet, Illinois

        Harrah's Joliet is a dockside casino in downtown Joliet on the Des Plaines River. The casino, now located on two dockside barges, is a Las Vegas-style casino on a single floor. The shoreside facilities adjacent to the casino include a pavilion featuring a lounge and a retail shop. Harrah's Joliet also has an 11-story luxury hotel with a fitness center. The hotel is located adjacent to the shoreside pavilion. We own 1.14 acres of additional land adjacent to the facility as a site for future development.

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        A limited partnership, in which an indirect subsidiary of the Company is the 80 percent general partner, owns the shoreside facilities, hotel and underlying real property, the barges, and the riverboat and hotel businesses. The businesses are operated by Harrah's as general partner in the partnership. The partnership also holds an easement for the boat basin/berth.

        The Chicago metropolitan area is the primary feeder market for Harrah's Joliet, with Joliet being only 30 miles from downtown Chicago.

East Chicago, Indiana

        Harrah's East Chicago Casino is a riverboat casino operated on four different boat levels. The shoreside facilities include a pavilion. A new 292-room luxury hotel at Harrah's East Chicago was completed in February 2002 at a total cost of approximately $47 million.

        The Harrah's East Chicago Casino and Hotel is owned by the Showboat Marina Casino Partnership ("SMCP"), an Indiana general partnership, in which the Company now has an almost 100% ownership interest. We acquired a 55% interest in SMCP in connection with our acquisition of Showboat in June 1998 and in February 1999 increased our ownership interest by buying out substantially all of the minority partners in SMCP. Some of the minority partners have retained the right to repurchase shares of SMCP at, essentially, the original purchase price plus interest. If this occurs, it would reduce our interest to no less than 91%.

        The casino's primary feeder market is the Chicago metropolitan area.

Tunica, Mississippi

        Harrah's Tunica is a dockside casino complex located approximately 30 miles south of downtown Memphis, Tennessee. The casino is constructed on a floating stationary barge. Shoreside facilities include a hotel, which features a 250-seat showroom and retail shops.

        The dockside casino facilities are owned by a partnership that is 100% owned by the Company. The underlying land is held under a long-term lease to the partnership. Two nearby competitors and the partnership that owns Harrah's Tunica own a golf course and related facilities adjacent to Harrah's Tunica.

        The primary feeder market for Harrah's Tunica is the Memphis metropolitan area.

Vicksburg, Mississippi

        Harrah's Vicksburg is a dockside casino entertainment complex. The facility, which is located in downtown Vicksburg on the Yazoo Diversion Canal of the Mississippi River, includes a 297-foot stationary riverboat casino designed in the spirit of a traditional 1800s riverboat. The casino is docked next to a shoreside complex, which features a seven-story hotel and retail outlet. The Company owns the riverboat and hotel and owns or holds long-term rights to all real property pertaining to the project.

        The casino's primary feeder markets are western and central Mississippi and eastern Louisiana.

New Orleans, Louisiana

        Harrah's New Orleans is located in downtown New Orleans. It has parking for 1,888 cars and approximately 145,000 square feet of back-of-house and support areas in the basement level of the casino under the main gaming floor. The second floor of the casino premises contains approximately 150,000 square feet of unfinished multipurpose non-gaming entertainment space.

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        Harrah's New Orleans is owned and operated by JCC and managed by a subsidiary of the Company pursuant to a management agreement with JCC. In December 2002, we acquired the remaining shares of JCC common stock to increase our ownership to 100%.

        The primary feeder market for Harrah's New Orleans casino is the New Orleans metropolitan area.

Shreveport, Louisiana

        Harrah's Shreveport is a dockside casino in downtown Shreveport comprised of a 254-foot 19th-century design paddlewheeler riverboat, the ShreveStar. A pavilion adjoins the casino on the banks of the Red River. The facility includes a hotel as well as restaurants, a convention center, health spa and 430-space valet parking garage.

        The casino and related facilities are owned by a partnership, with the underlying land held by the partnership under long-term leases from the City of Shreveport that expire on April 30, 2004, with eight 5-year renewal terms, for the pavilion and hotel. The partnership also leases the boat basin from the State of Louisiana under a lease that expires on July 6, 2004 with three 10-year renewal terms. As a result of our December 2002 acquisition of a controlling interest in Louisiana Downs, we own 95% of a limited liability company which owns both the partnership and Louisiana Downs.

        The primary feeder markets for the casino are northwestern Louisiana and east Texas, including the Dallas/Fort Worth metropolitan area.

North Kansas City, Missouri

        Harrah's North Kansas City is a dockside casino located in North Kansas City. Shoreside facilities, which are situated on land that is under a long-term lease expiring on December 31, 2004 with four 5-year renewal terms, include a hotel and pavilion. Additional amenities include a swimming pool and an exercise room.

        The casino's primary feeder market is the Kansas City metropolitan area.

St. Louis, Missouri

        Harrah's St. Louis is a dockside casino complex in Maryland Heights in northwest St. Louis County, 16 miles from downtown St. Louis. Shoreside facilities include a hotel, an entertainment lounge, restaurants and retail space. Development has begun on an expansion of Harrah's St. Louis, which will include a second hotel tower. The cost of this project is expected to be approximately $75 million.

        The primary feeder market for Harrah's St. Louis is the St. Louis metropolitan area.

Metropolis, Illinois

        Harrah's Metropolis is a dockside casino located in Metropolis on the Ohio River. The facility includes a 350-seat showroom.

        The primary feeder markets for the Metropolis facility are southern Illinois, western Kentucky and central Tennessee.

Lake Charles, Louisiana

        Harrah's Lake Charles is a dockside casino facility located in Lake Charles. The facility operates two riverboat casinos docked at a common site over waterbottoms subject to long-term leases from the

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State of Louisiana that expire on July 11, 2005 and August 27, 2005, respectively, with eight 5-year renewal terms.

        The primary feeder markets for the casino are southwestern Louisiana and eastern Texas, including the Houston metropolitan area.

Council Bluffs, Iowa

        Harrah's Council Bluffs Casino Hotel is a riverboat casino facility located next to the Missouri River, directly across from Omaha, Nebraska, in Council Bluffs, Iowa. Amenities in the shoreside hotel include a 160-seat cabaret, a health club/spa, and a beauty salon/barber shop. Work is under way on a renovation of the hotel at an estimated cost of $8.4 million which is expected to be complete in third quarter 2003.

        The primary feeder market for the casino is the Omaha, Nebraska metropolitan area.

MANAGED CASINOS

Ak-Chin, Arizona

        Harrah's Phoenix Ak-Chin casino is owned by the Ak-Chin Indian Community and is located on the Community's reservation, approximately 25 miles south of Phoenix. The casino includes an entertainment lounge and a retail shop. We manage the casino for a fee under a management agreement that expires in December 2004.

        The facility includes a 146-room resort hotel, which we manage for a fee under a management agreement that expires in December 2004.

        The primary feeder markets for the casino are Phoenix and Tucson, Arizona.

Cherokee, North Carolina

        We manage the Harrah's Cherokee Smoky Mountains Casino for the Eastern Band of Cherokee Indians on their reservation in Cherokee, North Carolina. The facility includes a multi-purpose entertainment room with approximately 1,500 theater-style seats and two gift shops. We manage the casino for a fee under a management contract expiring in November 2004.

        A 15-story, 252-room hotel and convention center connected to the casino via an elevated skywalk opened in second quarter 2002. It includes 11,626 square feet of convention and conference space, retail and dining space, a 700-space parking structure, a health club, and an indoor pool/spa. Construction was completed in fourth quarter 2002 on approximately 22,000 square feet of casino space. We have guaranteed a loan in an approximate amount of $123 million in connection with these expansions and refinancing of existing debt.

        The casino's primary feeder markets are eastern Tennessee, western North Carolina, as well as northern Georgia and South Carolina.

Topeka, Kansas

        Harrah's Prairie Band Casino-Topeka, located approximately 17 miles north of Topeka is managed by the Company for the Prairie Band Potawatomi Nation ("Prairie Band") on land owned by the Prairie Band. In addition to the casino and hotel, the complex includes an entertainment lounge and a gift shop. The facilities are managed by the Company for a fee under a management contract expiring in January 2008.

        Construction is expected to begin later this year on a $55 million expansion project which will add 198 hotel rooms, a 12,000 square foot convention center and a restaurant to the facility.

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        Topeka and Wichita, Kansas are the primary feeder markets for the casino.

Bluffs Run, Iowa

        We own the assets, other than gaming equipment, comprising the Bluffs Run Casino, a dog racing facility located in Council Bluffs, Iowa. We lease these assets to the Iowa West Racing Association ("IWRA"), a nonprofit corporation which, as required by Iowa law, holds the facility's gaming and pari-mutuel licenses and owns the facility's gaming equipment. We manage the facility for the IWRA for a fee. The management agreement and other rights associated with this property were acquired in connection with the Harveys acquisition and expire in October 2024. In addition to management fees, we receive lease income from the facility, which includes wagering on the on-site greyhound racetrack and a recreational vehicle park for 123 vehicles.

Rincon, California

        Harrah's Rincon Casino and Resort, located less than 50 miles north of San Diego, opened for business in August 2002. We manage the casino and hotel for the Rincon San Luiseno Band of Mission Indians pursuant to an agreement that expires in August 2007. The facility has 55,500 square feet of gaming space and a 201-room hotel. Funding for the project was provided under a $125 million loan guaranteed by the Company. We also loaned the Band $29.2 million (which has since been repaid) to enable it to operate a temporary casino pending the opening of the permanent casino.

        The primary feeder markets for the casino are San Diego, La Jolla, Del Mar, Escondido and Orange County, California.

OTHER

        We own and operate Bluegrass Downs, a harness racetrack located in Paducah, Kentucky, which we acquired as part of the Players acquisition. The track holds live racing meets each fall, as well as year-round simulcasting of horse racing events. In addition, we manage a greyhound racing track in Council Bluffs, Iowa. The underlying property of this racetrack is owned by the Company and leased to the operator for whom we manage the operation.

        We also own a one-third interest in Turfway Park LLC, which is the owner of the Turfway Park thoroughbred race track located on 197 acres in Boone County, Kentucky, and 47 acres of undeveloped land in the vicinity of the Turfway Park race track, which are currently held for sale. Turfway Park LLC owns a minority interest in Kentucky Downs LLC, which is the owner of the Kentucky Downs race track located on approximately 262 acres in Simpson County, Kentucky. In the event casino gaming is established in Kentucky, we hold certain management rights, directly or through Turfway Park LLC, at both Turfway Park and Kentucky Downs.

        In December 2002, we acquired a controlling interest in Louisiana Downs, a thoroughbred racetrack in Bossier City, Louisiana. The agreement gives Harrah's a 95% ownership interest in a limited liability company that now owns both Louisiana Downs and Harrah's Shreveport. We plan to install slot machines at the racetrack and expand and renovate the entertainment facility, which will be the only land-based gaming facility in northern Louisiana. Plans call for Louisiana Downs to offer approximately 900 slot machines by the time racing season begins in June 2003, approval for which was granted by the Louisiana Gaming Control Board in February 2003. We expect to open a new permanent facility with approximately 1,500 slot machines by June 2004.

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PATENTS AND TRADEMARKS

        We own the following trademarks used in this document: Harrah's®; Rio®; Showboat®; Bill's®; Harveys®, Total Rewards®, Bluffs Run®, Wagon Wheel®; Louisiana Downs^sm; Palazzo Suites^sm; Sammy's Showroom^sm; North Star^sm, ShreveStar^sm, South Shore Showroom^sm and Rio Secco Golf Club®. Trademark rights are perpetual provided that the mark remains in use by the Company. We consider all of these marks, and the associated name recognition, to be valuable to our business. We hold five U.S. patents covering the technology associated with our Total Rewards program-U.S. Patent No. 5,613,912 issued March 25, 1997, expiring April 5, 2015 (which is the subject of a license agreement with Mikohn Gaming Corporation); U.S. Patent No. 5,761,647 issued June 2, 1998, expiring May 24, 2016; U.S. patent No. 5,809,482 issued September 15, 1998, expiring September 15, 2015; U.S. patent No. 6,003,013 issued December 14, 1999, expiring May 24, 2016; and U.S. Patent No. 6,183,362, issued February 6, 2001, expiring May 24, 2016. We consider these patents to be valuable to our business, and we have initiated a suit against a competitor casino company seeking to enforce several of these patents. The defendant counterclaimed, in part seeking to declare these patents invalid and unenforceable. While we expect to prevail in the litigation, a finding that such patents are invalid or unenforceable could adversely affect our business or operations.

COMPETITION

        We own or manage land-based, dockside, riverboat and Indian casino facilities in most of the U.S. casino entertainment jurisdictions. We compete with numerous casinos and casino hotels of varying quality and size in the market areas where our properties are located. We also compete with other non-gaming resorts and vacation areas, and with various other casino and other entertainment businesses. The casino entertainment business is characterized by competitors that vary considerably by their size, quality of facilities, number of operations, brand identities, marketing and growth strategies, financial strength and capabilities, level of amenities, management talent and geographic diversity. In certain areas, such as Las Vegas, we compete with a wide range of casinos, some of which are significantly larger and offer substantially more non-gaming activities to attract customers.

        In most markets, we compete directly with other casino facilities operating in the immediate and surrounding market areas. In major casino destinations, such as Las Vegas and Atlantic City, we face competition from other markets in addition to direct competition within our market areas.

        In recent years, with fewer new markets open for development, competition in existing markets has intensified. Many casino operators, including Harrah's Entertainment, have invested in expanding existing facilities, in the development of new facilities in existing markets, such as Las Vegas, and in the acquisition of established facilities in existing markets, such as our acquisition of the casinos owned by Rio, Showboat, Players and Harveys. This expansion of existing casino entertainment properties, the increase in the number of properties and the aggressive marketing strategies of many of our competitors has increased competition in many markets in which we compete, and this intense competition can be expected to continue. These competitive pressures have adversely affected our financial performance in certain markets and, we believe, have also adversely affected the financial performance of certain competitors operating in these markets.

        We believe we are well positioned to take advantage of any further legalization of casino gaming, the continued positive consumer acceptance of casino gaming as an entertainment activity, and increased visitation to casino facilities. However, the expansion of casino entertainment into new markets, such as the recent expansion of tribal casino opportunities in New York and California and the authorization of slot machines at horse racing tracks in Louisiana, also presents competitive issues for us. At this time, the ultimate impact that these events may have on the industry and on our Company is uncertain.

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        Moreover, the casino entertainment industry is subject to political and regulatory uncertainty. See also "Management's Discussion and Analysis of Financial Condition and Results of Operations—Effects of Current Economic and Political Conditions" on page 29 and portions of "Management's Discussion and Analysis—Operating Results" and "—Regional Results and Development Plans" on pages 17 through 25 of the Annual Report, which information is incorporated into this document by reference.

GOVERNMENTAL REGULATION

Gaming Regulation

        The gaming industry is highly regulated and we must maintain our licenses and pay gaming taxes to continue our operations. Each of our casinos is subject to extensive regulation under the laws, rules and regulations of the jurisdiction where it is located or docked. These laws, rules and regulations generally concern the responsibility, financial stability and character of the owners, managers, and persons with financial interests in the gaming operations. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions.

        A more detailed description of the regulations to which we are subject is contained in Exhibit 99 to this Annual Report on Form 10-K, which Exhibit is incorporated herein by reference.

Other Regulations

        Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulation. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.

EMPLOYEE RELATIONS

        Harrah's Entertainment, through its subsidiaries, has approximately 42,000 employees. Labor relations with employees are believed by management to be good.

        Our subsidiaries have collective bargaining agreements covering approximately 6,850 employees. These agreements relate to certain casino, hotel and restaurant employees at Harrah's Atlantic City, Harrah's Las Vegas, Rio, Harrah's East Chicago, Showboat Atlantic City and Harrah's New Orleans.

ITEM 3. Legal Proceedings.

        The Company is party to ordinary and routine litigation incidental to our business. We do not expect the outcome of any pending litigation to have a material adverse effect on our consolidated financial position or results of operations.

ITEM 4. Submission of Matters to a Vote of Security Holders.

        Not applicable.

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PART II

ITEM 5. Market for the Company's Common Stock and Related Stockholder Matters.

        Our Common Stock is listed on the New York Stock Exchange and traded under the ticker symbol "HET". The stock is also listed on the Chicago Stock Exchange, the Pacific Exchange and the Philadelphia Stock Exchange.

        The following table sets forth the high and low price per share of our common stock, as reported by the New York Stock Exchange for the last two years:

        The approximate number of holders of record of our Common Stock as of January 31, 2003, was 9,526.

        We have not declared any cash dividends in the past two years. We do not presently intend to declare cash dividends. Our Board of Directors may reevaluate this dividend policy in the future in light of our results of operations, financial condition, cash requirements, future prospects and other factors deemed relevant by the Board.

ITEM 6. Selected Financial Data.

        See the information for the years 1998 through 2002 set forth under "Financial and Statistical Highlights" on page 16 of the Annual Report, which information is incorporated herein by reference.

ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

        See the information set forth on pages 17 through 32 of the Annual Report, which information is incorporated herein by reference.

ITEM 7A. Quantitative and Qualitative Disclosure About Market Risk.

        We are exposed to market risk, primarily changes in interest rates. We do not currently hold or issue derivative financial instruments for trading purposes and do not enter into derivative transactions that would be considered speculative positions. We attempt to limit our exposure to interest rate risk by managing the mix of our debt between fixed rate and variable rate obligations. Of our approximate $3.8 billion total debt at December 31, 2002, $1.5 billion is subject to variable interest rates, which averaged 2.3% at December 31, 2002. Assuming a constant outstanding balance for our variable rate debt for the next twelve months, a hypothetical 1% increase in interest rates would increase interest expense for the next twelve months by approximately $14.6 million.

12

        The table below provides information about our financial instruments that are sensitive to changes in interest rates. For debt obligations, the table presents notional amounts and weighted average interest rates by contractual maturity dates.

(1)

The fair values are based on the borrowing rates currently available for debt instruments with similar terms and maturities and market quotes of the Company's publicly traded debt.

        Our long-term variable rate debt reflects borrowings under revolving credit and letter of credit facilities provided to us by a consortium of banks with a total capacity of $1.857 billion. The interest rates charged on borrowings under these facilities are a function of the London Inter-Bank Offered Rate, or LIBOR and prime rate. As such, the interest rates charged to us for borrowings under the facilities are subject to change as LIBOR changes.

        Foreign currency translation gains and losses were not material to our results of operations for the year ended December 31, 2002. We sold our management contract for a casino in a foreign country in January 2000. As a result of this transaction, we no longer have any ownership interests in businesses in foreign countries. Accordingly, we are not currently subject to material foreign currency exchange rate risk from the effects that exchange rate movements of foreign currencies would have on our future operating results or cash flows.

        We also hold investments in various available-for-sale equity securities. Our exposure to price risk arising from the ownership of these investments is not material to our consolidated financial position, results of operations or cash flows.

ITEM 8. Financial Statements and Supplementary Data.

        See the information set forth on pages 34 through 55 of the Annual Report, which information is incorporated herein by reference.

ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

        See our Current Reports on Form 8-K filed with the Securities and Exchange Commission on May 3, 2002 and February 4, 2003.

13

PART III

ITEM 10. Directors and Executive Officers.

Directors

        See the information regarding the names, ages, positions and business experience of our directors set forth in the section entitled "Board of Directors" of the Proxy Statement, which information is incorporated herein by reference.

Executive Officers

14

Audit Committee Financial Expert Disclosure

        Our Board of Directors has determined that each of the members of our Audit Committee is an "audit committee financial expert" as defined by the Securities and Exchange Commission. Each of them is also independent as that term is defined by the listing requirements of the New York Stock Exchange.

Code of Ethics

        In February 2003, our Board adopted a Code of Business Conduct and Ethics that applies to our Chief Executive Officer and President, Chief Operating Officer, Chief Financial Officer and Chief Accounting Officer and is intended to qualify as a "code of ethics" as defined by rules recently adopted by the Securities and Exchange Commission. The Code is designed to deter wrongdoing and to promote:

•

honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;



•

full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the SEC and in other public communications made by us;



•

compliance with applicable governmental laws, rules and regulations;



•

prompt internal reporting to an appropriate person or persons identified in the Code of violations of the Code; and



•

accountability for adherence to the Code.

ITEM 11. Executive Compensation.

        See the information set forth in the sections of the Proxy Statement entitled "Compensation of Directors," "Summary Compensation Table," "Option Grants in the Last Fiscal Year," "Aggregated Option Exercises in 2002 and December 31, 2002 Option Values" and "Certain Employment Arrangements", which sections are incorporated herein by reference.

ITEM 12. Security Ownership of Certain Beneficial Owners and Management.

        See the information set forth in the sections of the Proxy Statement entitled "Ownership of Harrah's Entertainment Securities" and "Certain Stockholders," which sections are incorporated herein by reference.

15

Equity Compensation Plan Information

(1)

Excluding securities reflected in column (a).

(2)

Includes the Harrah's Entertainment, Inc. 2001 Executive Stock Incentive Plan

(3)

Includes the Harrah's Entertainment, Inc. 2001 Broad-Based Stock Incentive Plan, a description of which is set forth in Note 15 to the consolidated financial statements set forth on pages 34 through 54 of the Annual Report. The 2001 Broad-Based Stock Incentive Plan is intended to qualify as a "broadly-based" plan under Section 312.03 of the New York Stock Exchange Listed Company Manual.

ITEM 13. Certain Relationships and Related Transactions.

        See the information set forth in the section of the Proxy Statement entitled "Certain Relationships and Related Transactions," which section is incorporated herein by reference.

ITEM 14. Controls and Procedures.

        We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

        Within 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer and chief financial officer concluded that the Company's disclosure controls and procedures were effective.

        There have not been any significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the date of the evaluation described above. We determined that there were no significant deficiencies or material weaknesses, and therefore no corrective actions were taken.

16

PART IV

ITEM 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K.

        (a)  1.    Financial statements of the Company (including related notes to consolidated financial statements)* filed as part of this report are listed below:

Report of Independent Public Accountants.

Consolidated Balance Sheets as of December 31, 2002 and 2001.

Consolidated Statements of Operations for the Years Ended December 31, 2002, 2001 and 2000.

Consolidated Statements of Stockholders' Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2002, 2001 and 2000.

Consolidated Statements of Cash Flows for the Years Ended December 31, 2002, 2001 and 2000.

2.

Schedules for the years ended December 31, 2002, 2001 and 2000, are as follows:

*

Incorporated by reference from pages 33 through 55 of the Annual Report.

17

3.

Exhibits

18

19

20

21

22

23

24

25

26

27

28

**

Filed herewith.

†

Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form pursuant to Item 14(c) of Form 10-K.

(b)

The following reports on Form 8-K were filed by the Company during the fourth quarter of 2002 and thereafter through March 7, 2003:

(i)

Form 8-K filed October 22, 2002, regarding third quarter earnings.

(ii)

Form 8-K filed December 12, 2002, regarding the acquisition of JCC Holding Company.

(iii)

Form 8-K filed February 4, 2003, regarding the re-audit of the Company's 2001 financial statements by Deloitte & Touche LLP.

(iv)

Form 8-K filed February 5, 2003, regarding fourth quarter and full year results for 2002.

29

SIGNATURES

        Pursuant to the requirements of Section 13 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.

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.

30

CERTIFICATIONS

I, Gary W. Loveman, certify that:

        1.    I have reviewed this annual report on Form 10-K of Harrah's Entertainment, Inc.;

        2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

        3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

        4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

        (a)  designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

        (b)  evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

        (c)  presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

        5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

        (a)  all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

        (b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

        6.    The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 7, 2003

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I, Charles L. Atwood, certify that:

        1.    I have reviewed this annual report on Form 10-K of Harrah's Entertainment, Inc.;

        2.    Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

        3.    Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

        4.    The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

        (a)  designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

        (b)  evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

        (c)  presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

        5.    The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function):

        (a)  all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

        (b)  any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

        6.    The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: March 7, 2003

32

INDEPENDENT AUDITORS' REPORT

To the Board of Directors of and Stockholders
Harrah's Entertainment, Inc.
Las Vegas, Nevada

        We have audited the consolidated financial statements of Harrah's Entertainment, Inc. and subsidiaries ("Harrah's Entertainment") as of December 31, 2002 and 2001, and for each of the three years in the period ended December 31, 2002, and have issued our report thereon dated February 5, 2003 (which report expresses an unqualified opinion and includes an explanatory paragraph as to Harrah's Entertainment's change in its method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"); such consolidated financial statements and report are included in your 2002 Annual Report and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Harrah's Entertainment, listed in Item 15(a)(2). This consolidated financial statement schedule is the responsibility of Harrah's Entertainment's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

Deloitte & Touche LLP

Las Vegas, Nevada
February 5, 2003

33

INDEPENDENT AUDITORS' CONSENT

        We consent to the incorporation by reference in Registration Statement Nos. 333-57214, 333-39840, 333-63854 and 333-63856 of Harrah's Entertainment, Inc. on the respective Forms S-8, of our reports dated February 5, 2003 (which reports express an unqualified opinion and include or refer to an explanatory paragraph relating to Harrah's Entertainment, Inc.'s change in its method of accounting for goodwill and other intangible assets to conform to Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets"), appearing in and incorporated by reference in the Annual Report on Form 10-K of Harrah's Entertainment, Inc. for the year ended December 31, 2002.

Deloitte & Touche LLP

Las Vegas, Nevada
March 6, 2003

34

Schedule II

HARRAH'S ENTERTAINMENT, INC.

CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

(A)

Uncollectible accounts written off, net of amounts recovered.

(B)

See Note 16 to our Consolidated Financial Statements.

(C)

Reduction of reserve due to disposition of property.

(D)

2001 amounts have been restated to reflect Harveys Colorado as discontinued operations.

SII-1

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