Owners of the Harrah’s casino would get another 30 years to operate in Louisiana and would have to pay an additional $20 million per year to the state in minimum taxes, under major legislation approved by the Louisiana Senate Wednesday night.
The vote was 21-16, one more than the minimum needed.
Senators approved an amendment limiting the extra annual minimum payment to $20 million, down from the $40 million approved by two separate Senate committees in the preceding two days. That $20 million increase would boost the annual minimum payment to $80 million but not the $100 million envisioned the day before.
Changes added by the Senate will require House Bill 553 to return to the House for approval in the waning days of the regular legislative session.
House Speaker Taylor Barras, R-New Iberia, is the sponsor of HB553 so he can be expected to call up the measure as soon as he and lobbyists for Caesars Entertainment, Harrah's parent company, are certain that they have the 53 votes necessary to pass it. That could happen as early as Thursday.
The House easily passed HB553 on March 29, but that version called for Caesars to make much smaller payments to the state and city.
If the House passes the measure approved by the Senate, Gov. John Bel Edwards would have to decide whether to sign it. He has generally voiced support for the measure, but his spokesman said he wasn’t ready to offer a comment immediately after the passage of HB553.
"I just need to know that it's a good deal," Edwards said Wednesday afternoon during his monthly appearance on Louisiana Radio Network, adding that changes made by a Senate committee had made it better.
If HB553 passes, it would mark the second major pro-gambling measure approved during the legislative session. The House gave final legislative passage on Tuesday to Senate Bill 316, which would allow the state’s 15 floating casinos to become land casinos and to have thousands of more slot machines.
Another major gambling bill, Senate Bill 417, which would allow a riverboat casino to move from Bossier Parish to Tangipahoa Parish, has stalled in the Senate and appears dead for the session.
State Sen. Karen Carter Peterson, D-New Orleans, championed the Harrah’s casino bill on the Senate floor Wednesday, saying it would create jobs and generate new investment in New Orleans.
“I believe it’s a huge win for our state,” Peterson said.
Opponents said they didn’t have enough information to evaluate the measure because no one had conducted an independent analysis of it.
“How do we know it’s worth what we’re getting?” state Sen. Jack Donahue, R-Mandeville, asked at one point. “There’s only party that knows what’s going on,” he said at another point, “and that’s Harrah’s … We should sit down and get an evaluation of its worth.”
Caesars officials have been saying for months that, if the bill passed, they plan to invest $350 million to build a 340-room hotel, an upscale food court, a new 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.
The casino badly needs new investment because its “gaming win” – the net amount of money that gamblers lose – has dropped over the past decade from $419 million per year to $281 million.
Under language added by state Sen. Gary Smith, D-Norco, HB553 mandates that the casino owner spend the $350 million. At the request of Caesars’ officials, the casino owner must carry out that investment within four years.
Under another Smith amendment, the casino owner would have to pay the city $6 million a year for “casino support services,” up from $3.6 million currently.
After another change added at Smith’s behest, HB553 would require the casino owner to make a one-time upfront payment of $40 million to the state and city. Of that money, $30 million would go to the state and the other $10 million to the city.
Caesars also would have to pay $40 million to the state and city – with the same 75/25 split – if Vici Properties, a Las Vegas-based real estate investment trust – exercised its right to acquire Harrah’s New Orleans from Caesars.
The Senate spent nearly two hours on HB553 on Wednesday. The key amendment came when state Sen. Eric LaFleur, D-Ville Platte, sought to reduce the extra minimum payment to the state from $40 million per year to $10 million.
LaFleur’s move was a surprise because he had voted against the bill on Monday before the Senate Judiciary B Committee, saying Caesars wasn’t being asked to pay enough. Now he was seeking to allow the company to pay $30 million less per year.
LaFleur said he wanted to reduce the payment to address concerns that Caesars might walk away from the deal and kill the bill if required to pay the additional $40 million per year.
State Sen. Bodi White, R-Central, rejected LaFleur’s view.
“They wouldn’t walk on this deal,” White said. “They have too much in it.”
The Senate approved LaFleur’s amendment on an 18-14 vote. Two key votes to reduce the extra payment came from state Sen. Gerald Long, R-Winnfield, and state Sen. Page Cortez, R-Lafayette. After giving that key victory to Caesars, both men later were ironically among the 16 who voted against the bill.
LaFleur’s amendment could save Caesars $900 million in present value dollars over the length of the 30-year extension.
White then offered an amendment that would increase the extra $10 million payment to $20 million per year.
That vote was 24-8.
During other momentous votes over the years, the Senate chamber has been hushed with senators closely following the debate. But on Wednesday, they talked in clumps or on the phone while Peterson pitched the bill and while critics raised their concerns.
Senators likely didn’t pay close attention because they figured that Peterson had brought the bill only because she and Caesars’ well-honed lobbying team – it has 21 lobbyists – were sure it would pass.
When other senators were at the mic, Peterson went to the side several times to confer with Caesars’ top lobbyist, David Satz, a senior vice president and attorney for the company.
Also watching from the public gallery were Dan Real, who is Harrah’s general manager, and Randy Haynie, a state Capitol insider hired by Caesars to head the lobbying effort. Louis Reine, who is president of the Louisiana AFL-CIO and supported the measure because of the union jobs it would create, frequently huddled with them. Immediately after the bill passed, the men and other Caesars lobbyists intently analyzed sheets with the final vote.
If HB553 becomes law, action will shift to the New Orleans City Council. Caesars would need the council’s approval to amend its existing lease with the city since the casino sits on city-owned land. The council also will have to approve zoning changes that Caesars will seek related to the $350 million investment. Council members might demand more money from Caesars.
Voting for the Harrah’s license extension (21): Sens. Allain, Appel, Barrow, Boudreaux, Carter, Chabert, Erdey, Gatti, Johns, LaFleur, Luneau, Martiny, Mills, Morrish, Peacock, Peterson, Price, G. Smith, J. Smith, Tarver and Ward.
Voting against HB553 (16): President Alario, Sens Bishop, Claitor, Cortez, Donahue, Hewitt, Lambert, Long, Milkovich, Mizell, Morrell, Perry, Riser, Thompson, Walsworth and White.
Not Voting (2): Sens Colomb and Fannin.