Louisiana lawmakers agree to 30-year extension for Harrah’s
BATON ROUGE, La. (AP) — Louisiana will extend its no-bid contract with Harrah's to operate Louisiana's land-based casino in New Orleans for 30 years, under legislation that won final passage and heads to the governor's desk.
Support for the contract extension was a turnaround from last year, when a 30-year proposal failed amid Senate questions about whether it offered too little to the state. The House and Senate then hired a consultant to study the casino license's fair market value ahead of this year's debate.
The final deal struck, sponsored in legislation from House Speaker Taylor Barras and Senate President John Alario, offered tens of millions of dollars more than last year's proposal.
"We wanted to make sure we had the right deal for the state," said Sen. Gary Smith, the Norco Democrat who handled the bill in the Senate for Alario. He called it a package that is beneficial "to the city, the citizens and the state."
Harrah's will manage the New Orleans casino until 2054, in exchange for $325 million in investments by 2024 at the facility, adding new restaurants, a second hotel and more entertainment space.
Meanwhile, the state will get more money from the contractual arrangement than it receives today.
Smith and other bill supporters said the rewritten proposal reaches the high end of the value estimated for the license by the independent study, providing the state and New Orleans about $294 million over the three decades of the contractual arrangement.
Harrah's will have to pay $25 million upfront for the renewal, $17.5 million to the state and the rest to New Orleans. Additionally, the company will owe $40 million over three years starting in 2020, with $28 million to the state and the remainder to the city, according to documents provided to lawmakers.
The casino's annual payment to the state will continue, at either the current $60 million level or 18.5% of gross revenue, whichever is greater. Additional annual payments of $6 million to New Orleans for police, fire and other support services and $3.4 million to the state for cancer research facilities will be required.
Among opponents, New Orleans Democratic Sen. Karen Carter Peterson unsuccessfully sought tighter language clarifying a disputed state sales tax issue. Peterson, who publicly has struggled with gambling problems, also wanted more money dedicated to combat gambling addiction.
The House earlier in the session voted 84-9 for the legislation.