New study assesses value of Harrah’s New Orleans

New study assesses value of Harrah’s New Orleans

NEW ORLEANS (WVUE) - State lawmakers meeting in Baton Rouge this session have a full plate, including a reconsideration of one of the most controversial bills of last year’s session.

A bill to renew Harrah’s New Orleans’ lease is up for consideration once more, based on a new study. The 75-page study shows the value of the land-based casino license through the year 2054 as between $266 million and $292 million. The study was commissioned by the Louisiana Legislature after a 2018 bill to extend the casino license for 30 years crashed and burned after heated debate.

The new study examines Harrah’s commitment to spend $350 million on capital projects, including a new hotel. It also anticipates a 2% revenue increase from sports betting, estimated at around $10 million to $12 million a year.

See the full report here.

State lawmakers will soon consider House Bill 544 that would raise minimum payments to the state from $60 million a year, as proposed last year, to $65 million a year in this year’s bill. It would grant Harrah’s a new 30-year lease to begin when the current lease expires in five years, and one political analyst believes a sweeter pot could make for smoother sailing.

“They could not afford to ignore this deal, and we depend on Harrah’s and sports betting to balance the budget,” said Xavier political analyst Silas Lee.

The new enhanced deal is being offered even though the study shows that Harrah’s New Orleans casino admissions have dropped from 5.7 million visitors a year in 2008 to 4.2 million a year in 2018, according to the new study.

Though the people we spoke with had a favorable opinion toward Harrah’s, there are other reputable operators out there who won’t get a chance if this extension goes through.

But some say there are risks associated with putting the contract out to bid.

“Opening up for bid, does it mean we don’t attract the revenues? ...And that’s something Harrah’s and the state don’t want to see when it comes to the possibility of not securing those revenues,” said Lee.

The new deal would mean the city would need to negotiate a new land lease with Harrah’s. For now, Mayor Cantrell’s office said she is not taking a position on the casino extension bill.

Cantrell’s office said she’s still reviewing the extension.

That bill also includes protections for local hotel operators. It says that Harrah’s can’t sell rooms at its hotels to the general public at below-market rates.

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