Color me shocked on Friday when word came out Harrah's Entertainment (aka Caesars Entertainment Corporation) decided not to go public. The company blamed "market conditions" as the primary reason for not going public, but this is the same market that welcomed General Motors (NYSE: GM) with open arms. I'm calling their bluff.

It wasn't market conditions at all but more of a bad company looking to stick some of its problems on new investors. Maybe it was the $20 billion of debt that Harrah's still has looming or the dismal conditions Las Vegas has seen over the past few years that turned investors away. At the very least, I think Harrah's learned that its company just isn't viewed as the growth engine it used to be.

Since Harrah's was last public, the gambling market has changed dramatically. There are now even more options in Las Vegas with the opening of a plethora of resorts like MGM Resorts' (NYSE: MGM) CityCenter. The added rooms have pushed some of Harrah's mid-market casinos lower down the food chain.

Diversification, once Harrah's strong suit, has become a liability in recent years. Atlantic City is seeing increased competition from casinos throughout the northeast including a Las Vegas Sands (NYSE: LVS) casino in Pennsylvania. Local governments looking for extra tax dollars have been more open to gambling, leading even the conservative Wynn Resorts (Nasdaq: WYNN) to look at expanding in the U.S. beyond Las Vegas.

What to expect next
Don't worry -- Harrah's will be back with its pockets turned out again in six months or so. The best-case scenario for Harrah's would be that Las Vegas starts to turn around by then and an online gambling bill goes through. I have my doubts for both, and no matter when Harrah's comes to, the market there will be plenty of casino operators with better balance sheets and more growth to contend with.

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Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

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