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Roll of the Dice

Louisiana bets on bigger 'winnings' from gambling

Twenty years ago, the idea that an industry could start up in Louisiana and within a relatively short time become a significant source of state tax revenue may have seemed a pipedream. Then again, in the view of some people at the time, the prospect of widespread legalized gambling seemed more of a nightmare.

Arguments for and against the legalization of riverboat casinos shaped one of the most hotly debated issues in Louisiana’s history, with opponents fighting the startup on moral grounds and the perceived likelihood that the state’s poorest residents would pay a price because they would be motivated to take unwise risks with their money.

The strongest argument in favor of gambling, of course, involved the potential revenue the business might bring to a state government strapped for cash. The gambling industry’s most ardent in-state supporter was then Gov. Edwin Edwards, who had long enjoyed the art of the wager and believed legalized gambling would become a financial boon to Louisiana.

Ultimately, Edwards’ manipulation of the licensing process for riverboat casinos would land him in a federal court trial that led to an eight-year prison term. But, politically corrupt beginnings aside, riverboat casinos opened in all of Louisiana’s largest cities, and a single land-based casino, operated by Harrah’s Entertainment Inc., set up shop in downtown New Orleans.

Fits and starts marked the first decade of legalized casino gambling in Louisiana, with some riverboats racking up early profits while those in other locations – the New Orleans riverfront, for instance – faltered. Harrah’s, too, which opened temporarily in the Municipal Auditorium while awaiting completion of the behemoth that now stands at the foot of Canal Street, experienced early troubles that produced a bankruptcy before the casino found solid ground.

But all that is in the past, and two decades later, not only has the local industry matured, but lawmakers are considering expanding its presence. More than three dozen bills introduced recently in the Legislature include proposals to allow the state’s 15 riverboat casinos to permanently move ashore; lessen the tax burden for casinos that offer certain incentives to gamblers; and enable the land-based casino in New Orleans to expand its operations.

Other bills would potentially ease taxes or otherwise enhance the business environment for video poker operators and racetrack casinos, and still others seek to legalize fantasy sports, open up internet gambling in the state and allow legal sports betting.

At press time, none of the proposals had reached a final vote, and it is impossible to predict which might remain intact when the current legislative session ends in June. But what is clear is that the impact of gambling on state coffers has been substantial.

The latest reports from the Louisiana Gaming Control Board show that the state’s riverboat casinos employ nearly 15,000 workers and contributed more than $400 million to state coffers last year.

With some 1,800 video gaming machines operating statewide, video poker produced $170 million in franchise fees to Louisiana, while slot machines at horse-racing tracks generated net fees totaling more than $50 million.

Meanwhile, the Harrah’s land-based casino in New Orleans generated $64 million in revenue to the state last year. Since the casino’s opening in 1999, Harrah’s has expanded its footprint by opening a hotel that connects to the casino via a pedestrian tunnel under Poydras Street.

And in line with the current push to enhance the wagering environment, Harrah’s has won preliminary approval for a 30-year extension of its operating contract with the state and its plans to build a new 24-story, 340-room luxury hotel atop the casino’s entrance. In pitching lawmakers on the proposal, Harrah’s claimed its planned upgrade will generate $13 million in new payments to the state, $8 million to the city and 500 new full-time jobs.


Correction: My column about Charity Hospital in the April issue incorrectly identified the building’s owner. The state of Louisiana owns the building, and any redevelopment of it will be done under a long-term lease with the state.

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