Harrah’s aggressive push last year to extend its license to operate the only land casino in New Orleans for another 30 years collapsed on the final day of the legislative session, with state senators questioning whether taxpayers were getting a good deal.
Harrah’s is trying again to preemptively extend its license, five years before it expires, without the state putting it out for bid. The chances for House Bill 544 look promising during the 60-day legislative session that begins on Monday.
Harrah’s is offering tens of millions of dollars more to the state and city than last year over the 30-year period that would end in 2054. That was good enough to win the support of state Senate President John Alario, who played the key role in blocking Harrah’s last year. He is co-sponsoring the Harrah’s bill this year that House Speaker Taylor Barras is once again offering.
“You could literally say the major obstacle has been removed,” said Bernie Pinsonat, a political consultant and pollster who closely follows the Legislature.
Harrah’s is pledging to invest $325 million to build a second hotel and other amenities if the Legislature renews the state license. Company officials believe the investment would generate greater business, which has steadily declined over the past decade. More gambling by out-of-towners would mean more tax dollars for state and city coffers.
It’s almost unthinkable for a bill sponsored by both the Senate president and the House speaker to fail.
Gov. John Bel Edwards plans to meet with both men during the coming week to discuss the legislation, said Christina Stephens, a spokeswoman. The governor generally supported the measure last year by Barras, R-New Iberia.
Joseph Jaeger Jr., a prominent hotel owner, took the lead last year in saying that Barras’ bill shortchanged taxpayers. On Friday, he said expects to remain on the sidelines this year but will study the bill over the weekend.
“It’s a better deal than what last year was,” Jaeger said. “A good deal is neither side got everything they wanted. I hope I can support this.”
One potential stumbling block in the upcoming session could be New Orleans Mayor LaToya Cantrell.
She nearly derailed the bill last year at one point when she announced that Edwards and New Orleans City Council members had reservations about it.
It is the state Legislature that decides whether to extend the state operating license, but the mayor has a major say because, separately, Harrah’s leases the ground underneath the casino and parking garage from the city. Harrah’s must have both the state license and the city lease to operate.
The mayor is still reviewing a consultant’s report on the value of the deal and “is not taking a position at this time,” said Beau Tidwell, her spokesman.
The report by New Orleans-based United Professionals Co., which is part of the Sisung Group, found that Barras’ bill last year didn’t offer enough to the city and state but that a version by the state Senate, which demanded hundreds of millions of dollars more, sought too much.
When Harrah’s New Orleans Casino sought a 30-year renewal of its state license to operate last year, the state House asked for too little mone…
Alario, R-Westwego, commissioned the 132-page report, and in an interview on Friday cited it as the reason for signing onto Barras’ bill this year.
“I’m comfortable that the bill is as close as possible to the target in the study,” Alario said. “The fact that the bill didn’t go through the process last year was a plus.”
Barras did not respond to a text requesting an interview.
Barras’ House Bill 553 sailed through the House last year only to run aground when Alario, state Sen. Gary Smith, D-Norco, and other senators raised questions, inspired in part by newspaper articles.
The Senate finally passed Barras’ bill but only after amending it to require Harrah’s to pay hundreds of millions of dollars in today’s dollars over the 30-year renewal. Harrah’s balked at that, and the bill died.
On March 29, Speaker Taylor Barras strode down from his perch overseeing the Louisiana House of Representatives to the microphone on the chamb…
Compared to last year’s bill, this year’s would raise Harrah’s minimum annual payment to the state from $60 million to $65 million, beginning in 2022. The minimum would rise in step with inflation. The increase in the minimum would be worth at least $150 million in today’s dollars over the length of the renewal.
This year’s bill also calls for Harrah’s to make a one-time payment of $25 million that would be split between the state and city on a 70/30 percent basis. This provision was not included in Barras’ bill last year.
Harrah’s would have to make a $40 million one-time payment related to plans by its parent company, Caesars Entertainment, to sell the casino to Vici Properties, a Las Vegas-based real estate investment trust that has purchased a number of Caesars casinos. Vici would lease the Harrah’s casino back to Caesars. The $40 million payment, which also would be divided on a 70/30 percent split, was not included in Barras’ bill last year.
This year’s bill calls for Harrah’s to make an annual $3 million license payment to the state that was not in last year’s bill. Harrah’s also would have to make a $6 million annual payment to the city to cover its expenses to provide fire and police protection for the casino. That was in last year’s bill.
As in last year’s bill, this year’s would loosen the prohibitions on restaurants and meeting space that were included in the original casino legislation passed in 1992. Caesars has the support of the Louisiana Restaurant Association and the Greater New Orleans Hotel and Lodging Association for these changes because of the belief that Harrah’s $325 million investment will generate more hotel and restaurant business for local entities.
At Alario’s request, Caesars is taking a low-key approach to passing Barras’ HB544, working only with its long-time lobbyist, Randy Haynie and Haynie's son Ryan. Last year, in sharp contrast, the company hosted legislators for lunch at Ruth’s Chris Steak House, across from the casino, in advance of the legislative session and hired 21 lobbyists to try to make the bill become law.
The beneficiaries jokingly call it the “Lobbyist Full Employment Act.”
While the bill has his support, Alario did express concern that an unexpected issue might develop.
“Whenever you’re fooling with gaming people and the lawyers, you have to read the fine print,” he said.