Louisiana Lawmakers Disagree on Harrah’s New Orleans Extension

Posted on: May 18, 2018, 02:00h. 

Last updated on: May 18, 2018, 12:54h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Louisiana lawmakers are divided on the best way to proceed in extending the contract for Harrah’s New Orleans, the state’s lone land-based commercial casino.

Louisiana Harrah's New Orleans Caesars
Louisiana House Speak Taylor Barras is fighting against a Senate increase to Harrah’s New Orleans’ $60 million annual payment to the state. (Image: Sarah Gamard/Gambit/Harrah’s New Orleans/Casino.org)

On Wednesday night, the Louisiana Senate amended House Bill 553 to increase Caesars Entertainment’s annual payment to the state from $60 million to $80 million. Caesars is the parent company to Harrah’s New Orleans.

The legislation was then passed by the Senate in a 21-16 vote, and was sent back to the House of Representatives for endorsement of the change. House Speaker Taylor Barras (R) rejected the amendment, therefore moving the bill to a conference committee made up of three Senate members and three House reps who will try and determine its ultimate fate.

The Louisiana Legislature’s 2018 regular session ends today, but a special session is expected to commence next week to address a budget shortfall. Under the state constitution, both chambers must adjourn no later than June 4.

Difficult in Big Easy

Caesars’ commercial gaming license doesn’t expire for another six years. But Caesars lobbyists, which there are more than 20 actively working in the Louisiana capital of Baton Rouge, are looking to secure a 30-year extension long before the company’s license terminates in 2024.

Caesars agreed to terms with the House to continue its $60 million annual payment during the 30-year extension.

The casino operator said in exchange for the extension, it would invest $350 million in building a second hotel tower with 340 guestrooms, spa, nightclub, and roof space that would cover a one-block stretch over Fulton Street.

Caesars says the expansion would create 600 additional full-time jobs and generate millions of dollars in supplemental tax revenue for the state.

The City of New Orleans actually owns the Harrah’s property, and leases the building back to Caesars.

Caesars says its $350 million investment might be withdrawn should the company be forced to pay the state $20 million more per year, or $600 million, during the 30-year extension.

More Info Needed

The editorial team at The Advocate, the largest news outlet in Louisiana, recently called on lawmakers to slow down before deciding on such a lengthy extension.

“The casino contract for Harrah’s is one of the most important decisions that the state will make for decades,” the op-ed declared. “It is being rushed through the legislative process, even though the current contract is not up for six years.”

Sen. Jack Donahue (R-Mandeville) said he agrees this week, telling The Advocate, “It may be a good deal, but I don’t know that. The only way I can tell is if we had somebody who we hired do an analysis of the project.”

Governor John Bel Edwards (D) said the Harrah’s split in the legislature is simply part of the process and important in making sure the state gets the best deal possible.

“I’m going to reserve final judgement until a bill hits my desk,” the governor stated this week. “I can tell you I generally favor anything that would invest $350 million in our state.”