For the second year in a row, the state House on Thursday overwhelmingly passed legislation that would give owners of Harrah's a no-bid, 30-year extension of their monopoly license to operate the only land casino in New Orleans.
The vote was 84-9.
House Bill 544 requires Harrah’s owners, Caesars Entertainment, to invest $325 million to upgrade the casino — including a new hotel — and pay tens of millions of dollars more in additional taxes over the additional 30 years for the license. The bill extends the license five years before it expires in 2024.
Harrah’s investment will create 600 construction jobs and 500 new permanent jobs, said House Speaker Taylor Barras, R-New Iberia, the bill’s sponsor. He noted that HB544 does not expand the gambling area, which is 125,000 square feet.
House Bill 544 now goes to the Senate Judiciary B Committee where it will likely encounter few problems, unlike last year.
In 2018, the Senate committee stalled the Harrah’s license bill for several weeks as senators began questioning whether it was actually a good deal for the state. The committee finally approved the measure but sharply increased how much Harrah’s owners would have to pay for the license renewal.
The bill to grant the extension died on the final day of the session when House and Senate negotiators could not reconcile their differing bills.
Unlike last year’s bill, HB544 has the support of Senate President John Alario, R-Westwego, after he commissioned a private consultant’s report that said Caesars ought to pay much more to the state and city. Its recommendations are included in the bill.
Under one measure, known as net present value, Caesars will pay an estimated $130 million more to the state and the city of New Orleans over the 30 years than last year’s bill, which Barras also sponsored.
HB544 also counts on the support of New Orleans hotel owner and developer Joseph Jaeger Jr., who raised key questions that helped torpedo last year’s bill.
New Orleans Mayor LaToya Cantrell and Gov. John Bel Edwards both support HB544.
The net present value of last year’s bill to the government was about $160 million over 30 years while this one will be worth an estimated $294 million. The outside study, by the New Orleans-based consulting firm United Professional, said the license renewal has a fair market value between $266 million and $330 million.
The Legislative Fiscal Office estimates that HB544 would generate $79 million in additional revenue over the next five years for the state and $49 million for the city.
Under HB544, Caesars has pledged to build a 340-room hotel, modernize the casino’s interior and construct restaurants with “celebrity chef partnerships.” Its current hotel operates at 100 percent occupancy, Dan Real, general manager of the casino has said, adding that the new hotel will bring members of Caesars’ frequent gamblers’ club to New Orleans who want to stay in a Caesars hotel.
The company also plans to build an enclosure over Fulton Street, which is between the existing Harrah’s hotel and its parking garage, to create a year-round venue for local musicians, along with food and retail outlets.
“It is crucial that we move forward at this point,” said state Rep. Walt Leger III, D-New Orleans.
Caesars needs to reinvest in the casino to reverse a sharp drop in gambling over the past decade.
In fiscal year 2008, Harrah’s winnings totaled $419 million, according to State Police. In 2018, its winnings had fallen to $288 million.
The drop off meant that tax revenue paid to the state fell from $90 million in 2008 to $63 million in 2018.
Only two legislators asked substantive questions about HB544. One of them, state Rep. Pat Connick, R-Marrero, asked why he and his colleagues should renew the license now.
“If we wait five years, what do we get? We don’t know,” Barras said.
To spread the benefits and diminish potential opposition, HB544 would direct money from the casino for early childhood education, rural water projects, cancer research, the state’s compulsive gambling fund and New Orleans infrastructure projects.
No Democrats voted against the measure.
Last year’s Harrah’s bill passed the House on a 79-12 vote, with 13 members missing the vote, more than on typical bills.
The same thing happened on Thursday with 12 missed votes.
Two social conservatives were among those who didn’t vote: State Rep. Ray Garofalo, R-Chalmette, and state Rep. Rick Edmonds, R-Baton Rouge, strolled off the House floor into the adjoining antechamber just before the vote and remained there while their colleagues passed the measure. They returned to their seats immediately afterward.
In an interview afterward, Garofalo said he faced untrue accusations during his 2011 election campaign that he owned truck stop casinos. To counter that, he said he told voters that would not vote on gambling issues and has kept that commitment. Garofalo said he does own video poker machines.
Edmonds, who also didn’t vote on the Harrah’s bill in 2018, didn’t respond to two interview requests via text and a phone call.
Voting for the Harrah’s contract (84): Speaker Barras and Reps. Abraham, Abramson, Adams, Anders, Armes, Bacala, Bagley, Bagneris, Berthelot, Billiot, Bishop, Bouie, Bourriaque, Brass, C. Brown, T. Brown, Carmody, Carpenter, G. Carter, S. Carter, Chaney, Connick, Coussan, Cox, DeVillier, DuBuisson, Duplessis, Dwight, Emerson, Foil, Franklin, Gaines, Gisclair, Glover, Guinn, J. Harris, Henry, Hilferty, Hill, Hoffmann, Hollis, Howard, Huval, Ivey, James, Jefferson, Jenkins, R. Johnson, Jones, Jordan, LaCombe, N. Landry, T. Landry, Larvadain, LeBas, Leger, Lyons, Mack, Magee, Marcelle, Marino, McFarland, McMahen, D. Miller, Moore, Jay Morris, Moss, Muscarello, Norton, Pearson, Pierre, Pope, Pugh, Schexnayder, Smith, Stagni, Stefanski, Stokes, Talbot, Thomas, Turner, Wright and Zeringue.
Voting against HB544 (9): Reps. Amedee, Falconer, L. Harris, Hodges, Horton, M. Johnson, Miguez, G. Miller and White.
Not Voting (12): Reps. R. Carter, Crews, Davis, Edmonds, Garofalo, Jackson, Leopold, Jim Morris, Pylant, Richard, Seabaugh and Simon.