DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part of the
legislative instrument. The keyword, one-liner, abstract, and digest do not constitute part of the law
or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 553 Original 2018 Regular Session Barras
Abstract: Provides relative to the casino operating contract for the official gaming establishment
located in Orleans Parish and the renewal of such contract.
The present law Louisiana Economic Development and Gaming Corporation Act provides for the
creation of the Louisiana Economic Development and Gaming Corporation, the ownership interest
of which is vested in the state, which is empowered to enter into contracts for the conducting of
casino gaming operations at a single official gaming establishment in Orleans Parish. Pursuant to
present law, effective May 1, 1996, the Louisiana Gaming Control Board assumed control of the
affairs of the Louisiana Economic Development and Gaming Corporation and all powers, duties,
functions, responsibilities, and obligations associated therewith.
Under present law the term of the contract and any option to extend or renew may not exceed a total
of 20 years primary term and one ten-year renewal option.
Proposed law amends present law to authorize the Louisiana Gaming Control Board to enter into
additional 30-year renewal terms of the casino operating contract, in addition to the initial 20-year
term and the one ten-year renewal term, upon a showing that additional renewals of the casino
operating contract will benefit the economy of the state, encourage the continued growth of tourism,
and promote the stability of casino operations at the land-based casino, and subject to the approval
of any change in terms of the casino operating contract by the Joint Legislative Committee on the
Budget.
Proposed law requires the first 30-year renewal term which extends the casino operating contract to
July of 2054, to contain provisions that do all of the following:
(1)Require the casino gaming operator to pursue a capital investment on or around the official
gaming establishment of $350,000,000.
(2) Require the casino gaming operator to annually pay directly to the governing authority of the
parish where the official gaming establishment is located a sum of money, set forth in the
provisions of proposed law, to compensate the parish for the cost to the parish for providing
support services resulting from the operation of the official gaming establishment and
activities therein.
In this regard, present law requires the La. Gaming Control Board to enter into a contract for
casino support services (including but not limited to fire, police, sanitation, health, transportation, and traffic services) with the governing authority of the parish where the
official gaming establishment is located in order to compensate the parish for the cost to the
parish for providing support services resulting from the operation of the official gaming
establishment and the activities therein. The amount of the contract is determined by
negotiation and agreement between the La. Gaming Control Board and the parish, subject
to approval by the Joint Legislative Committee on the Budget, and is paid from the Casino
Support Services Fund, specifically created for this purpose.
Proposed law amends present law to repeal the procedure by which the La. Gaming Control
Board pays the governing authority according to the negotiated casino support services
contract, and instead provides that beginning on Aug. 1, 2018, the casino gaming operator
shall annually pay the governing authority directly to compensate the parish for providing
support services. Beginning Aug. 1, 2018, the annual payment, payable in quarterly
installments, shall be equal to $3,600,000. Beginning on Aug. 1, 2023, this amount shall be
adjusted by a rate that is the lesser of two percent or the Consumer Price Index, United States
city average for all urban customers (CPI-U), as prepared by the United States Department
of Labor, Bureau of Labor Statistics for the five calendar years immediately preceding the
adjustment, with adjustments being made to this amount in the same manner every five years
thereafter.
(3)Require the casino gaming operator to annually pay to the Louisiana Gaming Control Board
a sum of money as set forth in the provisions of proposed law, in addition to the existing
present law obligations to remit to the Louisiana Gaming Control Board any fees or
compensation.
In this regard, present law provides that effective midnight Mar. 31, 2001, the minimum
compensation to be paid by the casino operator to the La. Gaming Control Board shall be the
greater of: (i) eighteen and one-half percent of gross revenues or (ii) $50,000,000 for the
casino fiscal year April 1, 2001 through March 31, 2002 and $60,000,000 for each casino
fiscal year thereafter.
Proposed law retains present law and provides that, beginning Aug. 1, 2018, in addition to
this existing obligation, the casino gaming operator shall annually pay to the La. Gaming
Control Board the sum of money equal to $3,400,000. Beginning on Aug. 1, 2023, this
amount shall be adjusted by a rate that is the lesser of two percent or the Consumer Price
Index, United States city average for all urban customers (CPI-U), as prepared by the United
States Department of Labor, Bureau of Labor Statistics for the five calendar years
immediately preceding the adjustment, with adjustments being made to this amount in the
same manner every five years thereafter.
Present law authorizes the casino gaming operator to operate and conduct certain non-casino gaming
activities such as restaurants, cafeteria style food services, catering, special events, and leasing of
space at the establishment for certain specified purposes including but not limited to business
meetings for outside entities, special events, and parties. Present law further provides certain
restrictions on the casino gaming operator relative to such operations and activities, including restrictions on pricing and advertising.
Present law authorizes the casino gaming operator to own or operate offsite lodging which may be
physically connected to the official gaming establishment subject to certain conditions and
restrictions on the number of rentable units, square footage, advertising, and pricing.
Proposed law amends provisions of present law to provide that beginning Aug. 1, 2018, the casino
gaming operator is authorized to conduct certain non-casino related activities at the official gaming
establishment or at another location subject to certain requirements as follows:
(1)The casino gaming operator may have a meeting space for parties, VIP events, and the like
but shall not rent business meeting space for business seminars and training associated with
the sale or purchase of rentable units, unless such rentable units are rented at the rates based
on average seasonal rates for the preceding year of hotels located in the Central Business
District and French Quarter of Orleans Parish as compiled by a nationally recognized firm
that compiles data on room rates for such parish.
(2)The casino gaming operator, on its own or through an affiliate, shall not provide lodging,
except that the casino gaming operator may own or operate lodging at or in the vicinity of
the official gaming establishment consistent with both of the following:
(a)Certain conditions provided by proposed law relative to room rates, complimentary
and discounted hotel offerings, and advertising.
(b)Any agreement between the casino gaming operator and the Greater New Orleans
Hotel and Lodging Association and its predecessors, as such agreement may be
amended from time to time.
(3)The casino gaming operator is subject to the requirements of a memorandum of
understanding (MOU) and agreement entered into with the Greater New Orleans Hotel and
Lodging Association dated March 2018, which shall include an authorization to provide an
agreed upon number of additional hotel rooms at a new hotel site, and a MOU and agreement
entered into with the La. Restaurant Association dated March 2018.
In this regard, proposed law provides:
(a)Any action related to the enforcement of the memoranda of understanding and
agreement shall be instituted in a court of competent jurisdiction; and the La. Gaming
Control board shall retain jurisdiction over the casino gaming operator's compliance
with the provisions of present and proposed law and any regulations or rules adopted
by the La. Gaming Control Board.
(b)The memorandum of understanding and agreement with the Greater New Orleans
Hotel and Lodging Association dated March 2018, shall provide for certain
restrictions specified in proposed law, relative to advertising of market rates and room taxes, that apply only to the additional rooms authorized by the MOU and
agreement.
(Amends R.S. 27:241(A), 241.1, 243(C), and 247)