Harrah’s Casino and dozens of French Quarter bars and restaurants filed suit Friday to strike down New Orleans’ smoking ban just days before it is set to go into effect.
The suit, filed in Civil District Court, included a request for a temporary restraining order that would have prevented the city from enforcing the ban, which is scheduled to take effect Wednesday morning. But Judge Nakisha Ervin-Knott denied that request, meaning the city can enforce the ban at least until a May 21 hearing on the merits of the case.
Meanwhile, Harrah’s lobbyists in Baton Rouge are trying to get legislators to put pressure on the city, pointing them toward studies showing that having to provide a smoke-free environment could cost the casino 20 percent of its business, which in turn would mean fewer tax dollars for the state treasury.
With Louisiana facing a $1.6 billion projected budget deficit, some legislators have said the city should not cause a loss in gambling tax revenue.
Harrah’s, which fought hard against the smoking ban before the City Council, is the largest of the more than 50 companies that filed the suit.
The casino, which attempted a last-ditch effort to delay the ban at last week’s City Council meeting, has said it could seek to renegotiate its lease with the city if it does not receive an exemption from the rules.
The rest of the plaintiffs include Bourbon Street and other prominent French Quarter bars, such as Pat O’Brien’s, Lafitte’s Blacksmith Shop, the Tropical Isle shops and an array of strip clubs and music venues. There also are several restaurants, such as Broussard’s, Kingfish and Cafe Maspero, that already are barred by state law from allowing smoking but that appear to have signed onto the effort in solidarity with the French Quarter Business League, which represents businesses along Bourbon.
The lawsuit, which names Mayor Mitch Landrieu and the members of the City Council as defendants, calls the ordinance “vague and overbroad” and says it would damage business at the affected businesses by “requiring plaintiffs to confront, stop serving and run off their customers.” The city plans to rely primarily on businesses to enforce the ban.
The lawsuit also says the ordinance is invalid because council members did not receive a fiscal note — saying how much the measure would cost the city — when it was introduced, as required by law. According to the lawsuit, a fiscal note was not presented to council members until the day they voted on the measure.
“The fiscal note requirement is no more formality,” the lawsuit says. “These fiscal notes further the education of council members and the public at large when considering and debating the pros and cons of proposed ordinances.”
The fiscal note includes an estimate of how much revenue the city could lose if the ban causes a drop in business at Harrah’s, the Fair Grounds Race Course & Slots and venues offering video poker.
Harrah’s lease agreement with the city, for instance, guarantees the city $1.8 million each year and an additional amount, up to $1.8 million, that is dependent on Harrah’s taking in at least $287.5 million in a year. Harrah’s has said the latter amount will be in jeopardy when the smoking ban is implemented.
The lawsuit says that potential impact should have been vetted more closely by council members and viewed, in advance, by the public.
“How many police officers could be funded with the (money) which this ordinance is projected by the mayor’s office to cost the city annually in lost revenue and increased expenses?” the lawsuit says.
Casino officials have said previously they would likely seek to reduce their payments to the city by between $3.5 million and $13.5 million a year if the ban takes effect.
Landrieu’s office would not comment on the lawsuit.
Councilwoman LaToya Cantrell, who sponsored the smoke-free ordinance, said the court’s decision to let the law take effect until a May 21 hearing was a victory.
She said the lawsuit didn’t surprise her. “We expected Harrah’s to pull out all the stops to fight this law,” she said. “They’ll do whatever they can.”
In Baton Rouge, lawmakers have already begun to punish New Orleans.
The Joint Legislative Committee on the Budget has declined twice to approve an annual contract that would award the city its usual $3.6 million to help offset police and other costs incurred by the city for the casino.
“I have educated the committee members on the impact of the smoking ban,” said Harrah’s top lobbyist, Randy Haynie. “Yes, it does have an impact on the state budget.”
State Rep. Walt Leger, D-New Orleans, said the city is entitled to the money but that smoking ban concerns have held up approval of the casino contract.
Leger and other legislators from New Orleans say they are hearing from their colleagues who represent other parts of the state.
“My fear is that the city will suffer when the state is real lean,” said Sen. Edwin Murray, D-New Orleans. “I do think there will be repercussions.”
Murray said state legislators could decide to ask the city to pay for the presence of state troopers during Mardi Gras and other special events or could refuse infrastructure requests by the city.
Murray said the state will receive less money from a drop in business not only at Harrah’s but also from video poker machines at bars throughout the city and at the Fair Grounds. Workers at bars, Harrah’s and the Fair Grounds will lose their jobs, he said.
“This is much bigger to me than Harrah’s,” Murray said. “The smoking ban will affect a lot of people. The City Council should go back and find a way to hurt people the least.”
However, Murray said he does not believe the Legislature can pass a bill to pre-empt the city’s smoking ban or carve out an exemption for Harrah’s because of the city’s home rule charter.
The state receives $75 million to $85 million per year in gambling proceeds from Harrah’s.
Some of the tax revenue from the Fair Grounds’ video machines goes to City Park. John Hopper, a park spokesman, said its board was studying the potential impact of the smoking ban.
Cantrell said the smoking ban is actually an economic plus for New Orleans because without it, the city and state stand to lose millions of dollars in tax revenue from trade groups that will hold conventions only in cities that have smoking bans.
She said the ban puts the city in position to host seven trade associations that would represent a total of 276,000 hotel room nights, according to the New Orleans Convention and Visitors Bureau.
Cantrell said the state will also save millions of dollars in lower health care costs by not exposing casino employees to secondhand smoke.
“We have to look at the bigger picture,” Cantrell said, accusing Harrah’s of engaging in “scare tactics.”
Councilwoman Susan Guidry also said Harrah’s is putting out false information.
“They’re going to do what they can to protect their business,” Guidry said. “It’s important that we get information to legislators to respond to the pressure being put on them.”
Jaquetta White contributed to this report.