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Giving the Ball to Leroy



Once again, casino gambling is poised to squeak through the Louisiana Legislature by using a time-honored political and procedural device: the end run.

This time around, Harrah's casino in New Orleans wants to cut its $100 million minimum annual payment to the state in half and remove restrictions against hotel and restaurant operations. The only things standing in Harrah's way are a majority of the Legislature, the state constitution and several state laws.

No problem.

Just give the ball to Leroy -- in this case, the state Gaming Control Board -- and watch him run around the end with it.

That part of the plan unfolded last week, when the gaming board approved a new contract with Harrah's cutting the annual minimum payments and allowing hotels and full-service restaurants -- provided lawmakers make some related statutory changes. Gov. Warbucks has been twisting lawmakers' arms for months trying to convince them to grant those same concessions, without much success. Now he simply has to ask lawmakers to make a few statutory changes that require a mere majority.

Politically, that's a lot easier than throwing the entire contract into the legislative hopper and asking lawmakers (by two-thirds vote) to negotiate with Harrah's en masse.

But this end-around has a new wrinkle: the gaming board also raised Harrah's tax rate from 18.5 percent to 21.5 percent.

Wait a minute. Doesn't the state constitution provide that only the Legislature can raise taxes?

Of course it does. But, silly, this is not a tax issue; it's a contract issue. Harrah's merely agreed in its proposed new contract with the state to pay a higher rate. All the Legislature has to do is approve some related statutory changes. Those changes include amending the restrictions on hotels and restaurants, and lowering the minimum annual payments. That requires only a simple majority, not the two-thirds required for raising taxes and fees. (Lawmakers simply will ignore the issue of the higher tax rate that Harrah's negotiated with the gaming board.)

And presto! Harrah's will score another one, thanks to the latest end-around.

Oh, sure, some "nut" (Warbucks' term for anybody who disagrees with him on any issue) will probably file a lawsuit challenging the constitutionality of this little piece of legislative legerdemain. But don't despair. Our state Supreme Court will no doubt give its blessing. This is the same court which, in an earlier end-around, unanimously deemed that "gaming" is not "gambling" -- and even if it is, the Legislature has specific constitutional authority to "define" gambling (especially as long as lawmakers keep funding the new Supreme Court digs on Royal Street).

The gaming board raised Harrah's tax rate as a concession to riverboat casinos, which currently pay the same 18.5 percent as Harrah's (only Harrah's has the added burden of a $100 million minimum). The floating casinos in south Louisiana hope to go dockside -- officially, that is -- in exchange for the higher tax rate of 21.5 percent.

Lawmakers also must approve the higher tax rate for riverboats -- but by a two-thirds vote, because their tax hike will be a tax. That will be a tough sell.

Because two-thirds is a lot harder to get than a mere majority in the Legislature, the riverboats could wind up getting screwed, while Harrah's could have, well, smooth sailing.

The only thing I can't figure out is why the riverboats didn't opt for the same end-around as Harrah's. That is, why didn't they enter into a "contract" with the gaming board to go dockside in exchange for a higher "contractual" tax rate?

Perhaps they feared that the state Supreme Court would rule that a tax is a tax is a tax.

If that happens, then Harrah's will get the sweetest deal of all -- lower annual payments, no increased tax rate, plus hotels and full-service restaurants.

That could be the slickest end-around yet.

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