Harrah's New Orleans Contract Extension Wins Senate Support


BATON ROUGE, La. (AP) — Harrah's won support Wednesday from the Louisiana Senate for its push to operate the New Orleans land-based casino for up to another three decades.

Senators voted 21-16 for the no-bid contract extension , one more vote than needed for the bill to pass. But the legislation's fate remains far from certain with only days remaining in the session. The bill heads back to the House for review of extensive changes made by senators.

The contract extension has become one of the most contentious issues in the legislative session.

Under the terms as the proposal passed the Senate, Harrah's would get up to a 30-year extension to manage the New Orleans casino until 2054 — and would agree to a $350 million upgrade to its facilities, adding new restaurants, building a second hotel and enlarging its entertainment space..

In exchange, the state would get more money from the contractual arrangement than it receives today.

Harrah's would have to pay $40 million upfront for the renewal, 75 percent to the state and 25 percent to New Orleans. Additionally, the company's $60 million annual payment to the state would be boosted to $80 million. Other, smaller increases in payments to the state and city would be expected as well.

Sen. Karen Carter Peterson, a New Orleans Democrat, said the proposal was an economic development boost to the city and a financial boost to the state.

"Harrah's has been a good partner," she said.

The bill caused little controversy in the House, where it was shepherded by Republican House Speaker Taylor Barras. But it has drawn far more scrutiny in the Senate.

Opponents criticized the lack of a competitive bidding process to determine which company will run the New Orleans casino and the absence of an outside analysis of the financing proposal. They questioned why Harrah's was rushing to complete a new deal six years before the current contract expires and the implications of a possible sale transaction that wasn't discussed when the bill was moving through the House.

Sen. Jack Donahue, a Mandeville Republican, said senators have too little information about the value of the casino property to make a decision. Sen. Page Cortez said senators were "voting blind" on a deal that could be one of Louisiana's largest contractual arrangements.

"I think where we're at is we don't know where we're at," said Cortez, a Lafayette Republican.

Sen. Danny Martiny suggested if the state waits, Harrah's could be willing to offer less in a future deal because of changes in the gambling industry.

"I think what we have in front of us is a fair deal," the Kenner Republican said.

Gov. John Bel Edwards hasn't taken a position on the rewritten bill, but said he had concerns about the earlier version that passed the House, which had far fewer boosts in payments to the state.


House Bill 553: www.legis.la.gov

– by Melinda Deslatte, AP reporter

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