The House and Senate appear headed toward a showdown on the Harrah’s casino bill on Friday in what could be the final day of the regular legislative session.
The face-off was triggered when House Speaker Taylor Barras, in a risky move, won unanimous approval from the state House on Thursday to reject the Senate’s version of the casino legislation, House Bill 553. Barras, R-New Iberia, is the sponsor of HB553.
His move sent HB553 to a House/Senate negotiating conference in an attempt to win a more favorable version for Caesars Entertainment, the casino giant that owns the Harrah’s casino. The risk for Caesars is that failure to resolve the House/Senate standoff could kill the bill. The two sides began negotiations Thursday night.
The key sticking point is a vote by the Senate to require the casino owner to make a minimum annual payment of $80 million, up from the current minimum of $60 million.
On one side of the showdown are Barras and Caesars, which has 21 lobbyists working to win a 30-year extension of Harrah’s state operating license.
On the other side is Senate President John Alario, R-Westwego, who has consistently voiced skepticism of the deal embodied in HB553 and then voted against it Wednesday night when the Senate approved the bill, 21-16.
Alario said in an interview Thursday that he strongly recommended to Caesars’ top outside lobbyist, Randy Haynie, after the Senate vote that Caesars accept the Senate’s version.
Barras and Caesars did not heed Alario’s recommendation on Thursday when the speaker asked the House to reject the Senate version of the bill and send it to the negotiating conference.
Alario said he warned Haynie, a canny veteran lobbyist, that he would appoint senators who do not support the casino bill to represent the Senate in the negotiations.
Barras appointed himself, state Rep. Neil Abramson, D-New Orleans, and state Rep. Sherman Mack, R-Albany, as his three conferees. Alario said state Sen. Karen Carter Peterson, D-New Orleans, would be one of his conferees. She handled the bill in the Senate. Alario hasn't decided on the other two conferees.
At least two members from each chamber have to approve the final version of the bill. This provision ensures that two Alario appointees could block approval of changes not acceptable to the Senate president.
Alario said that the Senate, in approving the casino bill Wednesday night, has shown it does not favor allowing Caesars negotiating a payment lower than the Senate version of HB553.
Alario said the move by Barras and Caesars “is a risk if they come into (the conference) committee and say it’s our way or no way, if Caesars wants everything. That would put the brakes on everything.”
In an interview Thursday night, Barras said he was awaiting word from Caesars' lobbyists whether they could live with the extra $20 million annual minimum payment. He said Caesars officials would scuttle the deal if they couldn't accept that level and couldn't get it lowered.
Alario noted that Caesars and Barras, failing to win better terms, could retreat and ask the House to vote on the Senate version or something close to it.
Alario has been both speaker of the House and president of the Senate – for two terms each – and is the longest serving lawmaker, first taking office in 1972. Barras is finishing his third and final term in the House, not having served in a leadership positions during his first two terms. Caesars owns 48 gambling properties around the United States, including the Horseshoe Casino and the Louisiana Downs racetrack casino, both in Bossier City.
In brief comments to the House on Thursday, Barras said he had concerns with some of the Senate-added amendments. Those amendments stand to cost Caesars tens of millions of dollars more than the version of HB553 originally introduced by Barras. Another amendment would give less of the state tax revenue to rural areas, which has drawn concern from rural lawmakers in the House.
“We continue the conversation,” Barras told his colleagues. “We continue to make good progress.”
Gov. John Bel Edwards will have to approve HB553 if it wins final legislative approval. He has generally spoken in favor of the bill but has not disclosed whether he sides with Alario or Barras and Caesars.
The House approved HB553, 79-12, on March 29. But the bill began to face a chorus of criticism that it shortchanged the public to the benefit of Caesars, although no one could be sure since the state did not conduct an independent analysis of the casino deal.
The Senate responded to the criticism by mandating a $40 million upfront payment once the license is extended and Caesars reaches a deal to extend its lease for the casino with the city of New Orleans.
The Senate also would require Caesars to make another $40 million one-time payment if Vici Properties, a Las Vegas-based real estate investment trust that owns some 20 Caesars properties, exercises an option to acquire the New Orleans casino.
The Senate also approved the $20 million increase in the minimum annual payment to $80 million. That increase would take effect on July 1, 2021.
Under current law, Caesars pays $60 million to the state or 18.5 percent of the “gaming win” – the net amount lost by gamblers – whichever is greater.
Caesars hasn’t generated enough gaming win at the 18.5 percent tax rate to pay at least $80 million in state taxes since 2009.
State Sen. Eric LaFleur, D-Ville Platte, played the key role in the state Senate’s decision Wednesday to make the casino owner pay a higher annual minimum tax payment.
Initially, LaFleur benefitted Caesars when he won Senate approval for an amendment that would drop the minimum tax payment increase to $10 million, down from the $40 million increase passed by a Senate committee. The Senate approved LaFleur’s amendment, 18-14.
But having second thoughts, LaFleur then suggested to state Sen. Bodi White, R-Central, that White offer an amendment to raise the new minimum tax payment by another $10 million to $20 million. The Senate approved White’s move, 24-8.
“I’d very much like it to stay at $20 million,” LaFleur said in an interview on Thursday.
In return for the Legislature extending the license six years before the current one expires, Caesars would invest $350 million to upgrade a facility where business has been declining for the past decade.
Caesars officials have said they plan to build a 340-room hotel, an upscale food court, a flashy nightclub and a roof over a one-block stretch of Fulton Street between the existing Harrah’s hotel and its parking garage to create a mini-entertainment district.
They have said the planned investment would create 600 construction jobs, 500 permanent jobs and millions of dollars in new tax revenue for the city and the state. Leading business groups and major unions support HB553 because of the planned investment.
But Caesars officials have said that the company would make the investment only if HB553 wins passage and have warned that company higher-ups could decide to spend that $350 million elsewhere if the Legislature does not act this year.