The acquisition is subject to customary regulatory approvals and is expected to close during the third quarter or as soon as practical once approvals have been obtained.  The transaction has been approved by the Board of Directors of Harrah�s Entertainment and by Colony Capital.

As part of the purchase agreement, Harrah�s Entertainment will acquire Harveys Resort & Casino in Lake Tahoe, Nev.; the Harveys Casino Hotel and the Bluffs Run Casino, both in Council Bluffs, Iowa, and Harveys Wagon Wheel Hotel/Casino in Central City, Colo.  Harrah�s will not acquire Colony Capital�s agreement to purchase the Resorts Casino Hotel in Atlantic City.

�We are extremely pleased with the agreement to acquire Harveys,� said Phil Satre, Harrah�s Entertainment Chairman and Chief Executive Officer.

�We believe the synergies between Harrah�s and Harveys are very similar to those we have already achieved from the acquisition of Players International, Inc., which was completed in March 2000,� Satre said.  �The Harveys properties are an excellent complement to our existing geographic network of casino locations and will allow us to further expand the revenue and earnings capabilities of our industry-leading customer-loyalty program, Total Rewards.�

For the 12 months ended Feb. 28, 2001, Harveys reported Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from continuing operations of approximately $110 million.  The purchase price, therefore, represents approximately 5.7 times EBITDA for the 12 months ended Feb. 28.

�We expect to add approximately $25 million to Harveys annual EBITDA within 18 months of completing the acquisition,� Satre said.  �This is expected to be realized by elimination of redundant corporate overhead, reduced operating costs resulting from the consolidation of property administrative functions, and the implementation of Total Rewards in Lake Tahoe and the two Council Bluffs operations.

�The consolidation of the Harrah�s and Harveys operations in Lake Tahoe will allow us to improve performance and reduce operating costs by combining many aspects of what are today two separate facilities,� Satre said.  �We expect this combination to assist both properties in dealing with the expansion of Indian gaming in Northern California and to provide customers with a higher-quality gaming-entertainment experience by combining the best aspects of both facilities.
 

�Lake Tahoe is one of the country�s most spectacular resort destinations, and one of the most alluring for casino customers worldwide,� he said.  �By consolidating two of Northern Nevada�s finest facilities, we will be able to offer a broader array of amenities at a compelling value that will enhance their ability to attract customers who visit other Nevada casinos and California Indian gaming locations.  In addition, we expect Harveys customers will recognize the benefits of consolidating their play under

Harveys Resort & Casino  Lake Tahoe, Nevada

The acquisition of the two Council Bluffs properties will enable Harrah�s to introduce its unique brand of casino entertainment to customers from the western Iowa and eastern Nebraska markets, which generated approximately $350 million of gaming revenue last year.

�The two Harveys facilities in Council Bluffs have a combined database of more than 600,000 customers, virtually all of whom will be new to Harrah�s,� Satre said.  �We plan to convert the Harveys Casino Hotel there to the Harrah�s brand within 12 months of completing the acquisition, and maintain the Bluffs Run Casino operation as a separate branded facility that will have the technology and loyalty-building tools common to all Harrah�s-operated properties.

�The addition of Harveys Council Bluffs players to our database of more than 20 million customers should strengthen cross-market play across the entire Harrah�s network and give Council Bluffs customers access to the benefits of Total Rewards,� Satre said.  �Total Rewards� robust relationship-building tools should provide Council Bluffs management with the ability to generate customer loyalty in the same fashion as in other markets where we�ve converted assets to the Harrah�s brand.�

Harrah�s expects to make no change in the operation of Harveys Wagon Wheel Casino Hotel in Central City, Colo.

Harrah�s expects to finance the acquisition, including refinancing of Harveys existing debt, through issuance of public debt or bank-credit facilities.  Harveys had about $367 million of debt outstanding as of Feb. 28, 2001, including $150 million of 10 5/8 percent Senior Subordinated Notes due 2006.  Those Notes are callable after June 1, 2001, at a premium.

Earlier this year, Harrah�s refinanced a portion of its existing debt by issuing $500 million of 10-year, 8 percent Senior Notes.  These Notes received investment-grade ratings from Moody�s Investors Service and Standard & Poor�s.  Harrah�s expects to maintain its investment-grade credit ratings following the acquisition of Harveys.

Harrah�s is being advised in this transaction by Deutsche Banc Alex. Brown.  CIBC World Markets also advised Harrah�s.

Founded more than 60 years ago, Harrah�s Entertainment, Inc. is the most recognized and respected name in the casino-entertainment industry, operating 21 casinos in the United States under the Harrah�s, Showboat, Rio and Players brand names.  

This release includes �forward-looking statements� intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.