Common sense suggests that it’s probably not a great idea to strike a business deal with someone who’s suing you.
But at the Legislature, where common sense doesn’t always or even usually win the day, lawmakers are mulling over a long-term extension of the license for New Orleans’ only land-based casino while the casino’s owners are in court trying to avoid paying millions they owe in state taxes.
While asking state lawmakers to grant an early extension of their monopoly license to operate a land casino in New Orleans, the owners of Harr…
Legislators should put the brakes on this deal until the suit is resolved. A legal challenge by Harrah’s to the state’s ruling that it owes Louisiana a fortune in back taxes should make leaders cautious about the terms of any future dealings with Harrah’s. And that caution argues for prudence, not haste, in crafting any new relationship with Harrah’s.
Last year, Harrah’s tried to fast-track an extension to its exclusive contract to operate the New Orleans casino even though its existing agreement doesn’t expire for years. That push fell apart after critics began questioning what seemed like a sweetheart deal for the casino.
Now, what’s presumably a new and improved deal is back before the Legislature, but there’s a sticking point. Harrah’s is challenging in state court the Louisiana Department of Revenue’s contention that it owes back taxes to the state for hotel rooms that were comped or discounted — a bill that could be as much as $40 million.
The new deal for Harrah’s being considered at the State Capitol stipulates that the casino wouldn’t have to pay those taxes in the future if a state court rules in its favor.
The ongoing tax dispute directly affects the Superdome Commission and the Ernest N. Morial Convention Center, the two state entities that would otherwise be receiving the tax revenues in question.
The state’s existing lease with Harrah’s doesn’t expire until 2024. Why rush a new deal before a key question about the casino’s tax obligations is resolved in court?