Harrah’s future may hinge on riverboats

Jan 29, 2001 6:18 AM

The chance for Harrah’s to get a tax break from the state may hinge on what happened to the state’s 14 riverboats. A special session of the Louisiana Legislature will probably convene before the regular session starts March 26.

At that session, the question of taxes on riverboat casino revenues will be debated along with the future of Harrah’s. Riverboat casinos are presently taxed at 18.5 percent of gross revenues. Lawmakers may allow the present casino boats to operate at dockside in exchange for a 21.5 percent tax rate. If the casino owners want to operate casino barges similar to those in Mississippi, the tax rate would rise to 23.5 percent. The extra revenue may prove to be an incentive to lower taxes on Harrah’s.

As we approach the legislative session, wild and crazy proposals are coming out of Baton Rouge. One calls for Harrah’s to give up its licenses in Lake Charles and Shreveport if they pull out of New Orleans as promised on March 31. This draconian idea is so insane it will be forgotten quickly, but it does show the anti-Harrah’s sentiment of some of the legislators.

The clock is still ticking down towards the March 31 deadline…the date when Harrah’s Entertainment will stop writing checks for its New Orleans operation. With the deadline looming and the Gov. Mike Foster and so many other state and local officials working on this deal, I expect an 11th hour solution to be worked out and passed by the legislature during the special session, just days before the March 31 deadline.

Misissippi Revenues 5 Percent

Gross revenues for Mississippi’s 30 dockside casinos rose 5 percent in 2000 over 1999, the Mississippi Gaming Commission reported. A new record high of $2.650 billion was reached. Revenues were up 8 percent on the Mississippi Gulf Coast to $1.111 billion in 2000, about $89 million more than 1999. With no new gaming facilities opening in 2000, such modest gains were anticipated.

The year ended on a down note as Mississippi Gulf coast gamblers lost only $77.6 million in December 2000, up only $100,000 from last December.

The economy has taken its toll in 2000 on Mississippi gaming revenues. That coupled with a mature gaming market in Mississippi, doesn’t look good for double-digit percentage increases in gaming revenues to return. I do expect to see additional buyouts and consolidations in 2001.

Alpha Receives Mississippi Approval

The company that wants to reopen Mhoon Landing as a gaming site has received permission from the Mississippi Gaming Commission. The site is the one previously occupied by Bally. Alpha Hospitality will be using the Jubilation casino vessel they previously used in Hancock County at Bayou Caddy. This is the same vessel that was converted from a ferryboat and used in Greenville, Miss., under the name Cotton Club.

To be called Splash Back, the venture will feature many of the investors in the original Splash casino vessel that was the first in Tunica County. The company says it will need $3.5 million to ready the property for opening. One thing is for sure. They will have plenty of parking space. At one time four casino vessels occupied property at Mhoon Landing. Splash, President, Bally and Lady Luck all operated casinos at Mhoon Landing, property owned by Flowers and Parker. One by one, they moved away as it became obvious that locations closer to Memphis were preferred by both customers and employees.

Casino Zoning Plan Adopted

For several years, the controversy on how to zone the annexed area that includes Casino Magic appears to be nearing an end.

On Thursday, a public hearing, in front of four council members, was held in Bay St. Louis, Miss. The zoning would divide much of the annexed area into two parts, a casino district around Bay Cove Harbor where Casino Magic sits, and a resort district around the casino district.