The continued financial troubles of Harrah’s Casino-New Orleans will once again land the company in bankruptcy court. Harrah’s plans to file a "friendly" bankruptcy to reorganize about $500 million in debt in January.
This bankruptcy will not be as severe as the one filed in 1995 that shut down the temporary casino on Basin Street and stopped work on the permanent site they now occupy. The company plans to remain open while finances are reorganized. The main debt load is with the bond holders and holders of JCC Holding Company stock.
As a result of the pending bankruptcy, the state will monitor the cash flow of the casino carefully "to be sure there’s enough cash on hand to fund operations and protect the public so their win will be satisfied," according to Assistant Attorney General Jay Quinlan. State Police auditors will watch the cash reserves.
Bad news keeps coming the casino’s way. Their November gaming win of $19.6 million was $1.5 million off from October. The casino missed its daily tax payment to the state of $274,000. Harrah’s Entertainment had to guarantee the tax.
The casino desperately needs to cut its annual tax payment of $100 million in half and generate non-gaming revenue with a hotel and restaurants. Under the current contract, Harrah’s-New Orleans can’t operate a hotel or offer any food service in the casino other than in a 250-seat buffet.
These problems have to be tackled in a special session of the Louisiana Legislature. Gov. Mike Foster says he won’t call one until there is broad consensus among lawmakers about what to do. Until then, the clock is ticking toward March 31, when Harrah’s Entertainment has said it will stop guaranteeing tax payments to the state.
Hollywood opens casino in Shreveport
Louisiana debuted its 14th riverboat casino in Shreveport, the state’s largest gaming market. The Hollywood Casino is the fifth in the Shreveport/Bossier City market. The Dallas-based company also owns and operates riverboat/dockside casinos in Tunica, Miss., and Aurora, Ill. All three properties have a Hollywood movie theme featuring memorabilia from famous motion pictures.
The $230 million project includes a 30,000 square-foot riverboat casino and a 14- floor, 403-room hotel that, unlike other casino projects, opened at the same time as the casino.
The riverboat holds 3,500 customers and was built in two pieces so it could fit through the bridges and locks on the Red River. Once in Shreveport, the two pieces were fitted together and work continued finishing the vessel.
Hollywood is next to the Harrah’s casino on the Shreveport side of the Red River. On the other bank of the river in Bossier City are three casino complexes owned by Horseshoe, Isle of Capri and Casino Magic.
The Shreveport/Bossier City market is the state’s largest, with monthly revenues in the $55 million to $60 million range. The addition of Hollywood Casino is expected to grow the market past $70 million per month, although in the first few months of operation it may cannibalize market shares of the four other boats.
Sheriff gets video poker license
In a move surely to spark debate, the top law enforcement officer of Jefferson Parish, La., has been awarded a video poker "truck stop" license. Jefferson Parish is just outside the city of New Orleans.
Sheriff Harry Lee and several family members were unanimously approved for the license by the Louisiana Gaming Control Board. The license allows operation of up to 50 video poker machines since the property meets the state’s requirements as a truck stop.
Lee’s office doesn’t regulate any gaming activity in the state.