There is a considerable body of opinion in Louisiana that holds just because ex-Governor Edwin Edwards has received a 10-year sentence for corrupting the riverboat gaming licensing process, he will not spend any time in jail.
Edwards has been ordered to report to a prison yet to be determined on February 5. Before his reporting date, Edwards’s lawyers hope the Court of Appeals will allow him to stay free during the appeal process. If the court does not act by that date or turns thumbs down on his request, Edwards will begin serving his sentence.
The appeal of his conviction could take a year or more. At least one nationally prominent lawyer is busy at work trying to overturn his conviction.
Foster’s bail out of Harrah’s needs legislature okay
Louisiana Governor Mike Foster says his staff has worked out a deal to keep Harrah’s Casino-New Orleans open past the March 31, 2001 deadline. It would cut Harrah’s annual state tax payments in half from $100 million to $50 million for the first year and a "rolling" three-year commitment of $60 million for the following three years.
A number of problems surround the "deal". It has to be approved by the Louisiana Legislature that goes into session on March 26, 2001. Harrah’s has said they will close on March 31, 2001 if they don’t get tax relief and other concessions by that date.
It is very doubtful that the Louisiana Legislature could hear, debate and vote on this new proposal in six days. That’s why a special session of the legislature may be called a week or two before the regular session to consider the Governor’s plan for Harrah’s.
While details of the plan are not known, one feature may be a trade off of higher taxes for the riverboats if they are allowed to remain dockside. The riverboats may also agree to even higher taxes if they are allowed to construct gaming barges similar to Mississippi vessels.
Foster has been quoted as saying, "The lawmakers can sign it or not. It all boils down to whether we want their money or not." Foster’s aides and key lawmakers have been meeting to save the 2,900 jobs at Harrah’s and to get at least $60 million in state tax, rather than close the casino.
A respected local business school dean and the state’s legislative auditor recently indicated that even cutting taxes in half would not stem the flow of red ink. Harrah’s is $588 million in debt and losing as much as $11 million per month. A 50% tax cut would save $4 million per month.
Stay tuned for the next installment of "As the Slot Reels Turn."
Good news for Harrah’s Shreveport
While the Harrah’s property in New Orleans suffers one setback after another, its Shreveport property is hiring and expanding. A new 514-room hotel is about to open and more than 40 trainers from Harrah’s other 23 properties have come to Shreveport to indoctrinate more than 300 workers.
About half of the rooms will open next Monday with the balance on line by March 1. Two lounges and a restaurant will open in the hotel on February 15.
A hotel is a necessary amenity to compete in the $700 million-per-year Shreveport-Bossier City market that recently saw the opening of Hollywood Casino adjacent to the Harrah’s property. Its hotel opened with the rest of the property.
Indiana to debate dockside casinos
A new study released by the Casino Association of Indiana predicts that the state could generate $328 million in additional tax revenue if the state’s 10 riverboat casinos were allowed to remain dockside. These funds would help balance the state’s next two year budget.
With no other tax revenues of this magnitude available, the legislature is sure to take a close look at this proposal. Neighboring Illinois saw sharply rising casino revenues when dockside gaming was approved in 1999.
This debate will no doubt spill over to Louisiana, which also has a cruising law. Currently operators in the Pelican State would accept an increase in their state tax from 18.5 to 21.5 percent if dockside gaming is approved.