Shares of Harrah's Entertainment (NYSE:HET) are off slightly today, though the widely diversified casino operator posted record third-quarter results.

Thanks largely to the recent acquisition of Horseshoe Gaming (see Harrah's Gains, Gamers Lose) and continued benefit from cross-market play, Harrah's saw third-quarter revenues grow 25.5% to a record $1.31 billion. As a result, property EBITDA (earnings before interest, taxes, depreciation, and amortization) climbed 26.2% to $374.2 million, and net income rose 19.4% to $118.8 million, helping diluted earnings per share climb 17.8% to $1.06 per share.

Analysts had expected Harrah's to earn $1.04 per share on $1.35 billion in revenues.

The bulk of the gains came from the three Horseshoe properties, which added $217.9 million in revenues, $55.7 million in EBITDA, and $0.09 per share to earnings. At the same time, same-store revenues gained 8.8% over last year, with cross-market play rising 16.5%. Those gains showed up the company's two Las Vegas properties -- Harrah's Las Vegas and Rio -- where revenues climbed 18.7% to $265.8 million, pushing EBITDA up 32.2% to $75.6 million.

Harrah's Laughlin also turned in record results.

Elsewhere, Harrah's saw stronger results on Atlantic City based on gains at its Showboat property. Harrah's Atlantic City -- just up the street from MGM Mirage (NYSE:MGG) and Boyd Gaming's (NYSE:BYD) Borgata -- reported mixed results, with slight revenue gains being offset by lower income and EBITDA.

Harrah's showed gains in Iowa and Missouri, where the company competes with riverboat pure plays Ameristar Casinos (NASDAQ:ASCA). In Council Bluffs, Iowa, EBITDA climbed 47.7% on 5.9% combined revenue growth at its two properties, though the gains can mostly be attributed to the lower tax rate at the racino (race track with slot machines). Harrah's made great strides in St. Louis with its new hotel tower, poker room, and additional amenities, reclaiming the leading market position from Ameristar -- even as the latter company managed revenue gains over last year.

While Harrah's North Kansas City continues to fumble between recently renovated boats from Ameristar and Argosy Gaming (NYSE:AGY), the company said that it expects to rebound once it completes a $107 million expansion late next year.

In other news, Harrah's announced that chairman Philip Satre will retire and that CEO Gary Loveman will assume the chairmanship. The company also said that it expects to complete its megamerger (see No Quick Win in Casino Merger) with Caesars Entertainment (NYSE:CZR) in mid-2005. Last month, the two companies announced the sale of four properties to an affiliate of Colony Capital for $1.24 billion to facilitate the merger (see Harrah's/Caesars Expects Payoff and Smooth Sale for Harrah's?).

Harrah's is the most geographically diversified casino operator in existence and in my opinion the best-run gaming company from a business perspective. Personally, however, I prefer smaller companies, and with all of the acquisitions, Harrah's is quickly becoming too big for my investment taste. That said, if you already own Harrah's shares, Harrah's remains a safe, conservative bet on gaming.

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Fool contributor Jeff Hwang owns shares of Ameristar Casinos.