Legislation that would allow Harrah’s New Orleans Casino to slash 400 jobs has again been shelved at the Capitol — the second time in a week that the proposal has been unable to make it out of committee, which could signal its demise for this session.

As far as he’s concerned, said Sen. J.P. Morrell, who chairs the Senate Judiciary B Committee, the issue is over for this legislative session.

Underlying the effort to eliminate jobs at the state’s only land-based casino is the financial impact of a recently enacted city ban on smoking indoors at bars and casinos, the New Orleans Democrat said after Tuesday’s hearing.

“From the committee’s perspective, not enough time has passed to see the effect the smoking ban is having,” Morrell said. “It’ll be revisited” in future sessions, he said.

As part of its license, Harrah’s is required to maintain a certain employment level, but casino officials argued that the agreed level should be lowered from 2,400 employees to 2,000 because of changing industry demands.

They said the 3-week-old smoking ban was only part of the reason for the requested change.

Since the contract was first signed in 2001, the gambling industry has had numerous technological changes, which — along with the impact of the 2008 recession and Hurricane Katrina — altered the marketplace, according to Harrah’s. The six other land casinos in Louisiana, none of which have the same contractual obligations as Harrah’s, have decreased their workforces between 16 percent and 44 percent since 2002, according to an exhibit Harrah’s gave the committee.

Harrah’s sought to eliminate about 17 percent of its 2,400 positions.

“Trying to operate your business to this number that doesn’t make sense anymore does hurt our employees,” said Dan Real, Southern regional president for Caesars Entertainment and senior vice president and general manager for Harrah’s New Orleans.

Harrah’s has resorted to shorter shifts and fewer full-time positions in order to meet the 2,400 jobs mandate, the committee was told. Even without the smoking ban, Harrah’s said, it is operating at roughly 80 percent of its 2007 business levels.

The proposal in Senate Bill 236 first came up on Thursday, but New Orleans area legislators argued that the city had not been made aware of the plans in advance and had not had time to respond.

Sen. Karen Carter Peterson, D-New Orleans, argued again Tuesday that the changes should first be vetted in New Orleans.

“The process has not been one that is fair to the taxpayers at this point,” she said. “There needs to be some relief, but these discussions are happening in the Capitol in Baton Rouge when the people impacted (are in New Orleans).”

The Senate panel tried to send the legislation to the full Senate for consideration but couldn’t muster enough votes to do so. Instead, it was “involuntarily deferred” on a voice vote, which likely signals the death of the proposal.

Rodney Braxton, a lobbyist for the city of New Orleans, said Harrah’s has an advantage in its location and exclusivity. He argued that the casino already has benefited from concessions that have allowed the construction of a hotel and restaurants inside the casino.

“They have one of the best locations in the country,” Braxton told the committee Tuesday.

Real said the casino already struggles to meet the state’s required employment level. He said the 400 jobs would be eliminated through attrition and not direct layoffs.

“We will simply be right-sizing,” he said. “We truly hire today just to keep the number where it needs to be.”

Some legislators said they understand the casino’s needs.

“I can understand, as a businessman, they want to be released from this commitment they have,” said Sen. Gregory Tarver, D-Shreveport. “A lot of things have changed.”

Mark Ballard, of The Advocate Capitol news bureau, contributed to this report. Follow Elizabeth Crisp on Twitter, @elizabethcrisp. For more coverage of Louisiana state government and politics, follow our Politics blog at http://blogs.theadvocate.com/politicsblog .