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The Harrah's Casino sign illuminates Canal St. in New Orleans, La. Tuesday, Dec. 8, 2020. (Photo by Max Becherer, NOLA.com, The Times-Picayune | The New Orleans Advocate)

The Harrah’s casino in New Orleans would get a major tax break under legislation approved by the state Senate on Monday.

House Bill 137 calls for the state to begin receiving a $1.3 million per year payment from Harrah’s in lieu of current law that has the casino company paying state sales, use and occupancy taxes that add up to about $1.6 million per year to two state entities: the Louisiana Stadium and Exhibition District (which oversees the Superdome, among other things) and the Ernest N. Morial New Orleans Convention Center.

The state is apparently moving to cut a deal with Harrah’s just months after the Louisiana Supreme Court ruled in the state’s favor. Federal filings show that Harrah’s owes the state about $43 million in taxes not paid while contesting the law.

The court ruled that Harrah’s owes the back taxes to the state for rooms it comps at its hotel across the street from the casino on Poydras Street but not for rooms it comps at hotels owned by others.

“This ends the lawsuit,” said Sen. Gary Smith, D-Norco, who handled the legislation in the Senate. The sponsor of HB137 is Rep. Royce Duplessis, D-New Orleans. He did not respond to requests for comment on his legislation.

The Senate approved HB137 on a 33-4 vote. The bill goes to the House for approval of the Senate changes.

Kimberly Robinson, the state secretary of Revenue, said in an interview that Gov. John Bel Edwards is supporting the legislation as part of a larger deal with Harrah’s that will end the lawsuit in which the company for years has challenged state taxes on hotel rooms it comps for its guests.

“The administration is working on a resolution for a broad set of issues that support the overall New Orleans tourism infrastructure,” Robinson said.

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She said the legislation did not involve separate negotiations for Superdome naming rights with Caesars Entertainment, which owns the Harrah’s casino.

The stakes with HB137 were high for Caesars. Dan Real, who oversees the company’s casinos in Louisiana, watched much of the day’s proceedings in the Senate.

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In a brief interview, Real said the state was getting a good deal.

The Legislative Fiscal Office noted that the $1.3 million the state would begin receiving from Harrah’s would not keep pace with inflation and would not increase even though the company is about to double the size of its hotel.

Under a 2019 agreement with the state, Harrah’s has begun work on a $325 million investment that will build an additional hotel on top of the existing casino at the foot of Poydras and Canal streets. Harrah’s will also upgrade other parts of its existing facilities.

State law HB137 also would make further changes to a law originally established that would require Harrah’s to employ a minimum number of employees.

Originally, the casino company had to have 2,400 employees within the casino. Later legislation allowed Harrah’s to include up to 400 employees at the hotel against the minimum. HB137 would allow Harrah’s to count other employees, including those who work for the Fillmore Theater on its property.

Email Tyler Bridges at tbridges@theadvocate.com.