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 Reengrossed 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 all of the following:
(1)The casino gaming operator making a capital investment on or around the official gaming
establishment of $350,000,000.
(2)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.
(3)Approval by the Joint Legislative Committee on the Budget of any change in terms of the
casino operating contract.
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 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 two calendar years immediately preceding the
adjustment, with adjustments being made to this amount in the same manner every two years
thereafter.
(2)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 (R.S. 27:241.1) 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 two calendar years
immediately preceding the adjustment, with adjustments being made to this amount in the
same manner every two 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 may 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 the Civil District Court for the Parish of Orleans; 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.
Present law requires the corporation, on a daily basis, to transfer to the state treasury for deposit into
certain funds in the treasury the amount of net revenues which the corporation determines are surplus
to its needs. Further provides that such net revenues shall be deposited as follows:
(1)In each year for which the Joint Legislative Committee on the Budget disapproves or does
not act upon the amount of the casino support services contract, no monies are deposited in
and credited to the Casino Support Services Fund:
(a)10% shall be deposited in and credited to the Support Education in Louisiana First
Fund and used solely and exclusively for specific purposes provided in present law.
(b)90% shall be deposited in and credited to the Support Education in Louisiana First
Fund.
(2)In each year for which the Joint Legislative Committee on the Budget approves the amount
of the casino support services contract:
(a)The first $1,800,000 shall be deposited in and credited to the Casino Support
Services Fund.
(b)The next $60,000,000 shall be deposited in and credited to the Support Education in
Louisiana First Fund.
(c)After satisfying the requirements of paragraphs (a) and (b) above, monies shall be
deposited into the Casino Support Services Fund until the casino support services
contract is fully funded for that year.
(d)After satisfying the requirements of paragraph (c) above, the remainder of the monies
shall be deposited in and credited to the Support Education in Louisiana First Fund.
In this regard, proposed law amends present law to provide for the allocation and distribution of such
net revenues as follows:
(1)Beginning Aug. 1, 2018, if the amount received pursuant to present law (R.S. 27:241.1(A))
is $60,000,000 or less per fiscal year, the amount received shall be allocated as follows:
(a)10% shall be deposited in and credited to the Support Education in Louisiana First
Fund and used solely and exclusively for purposes provided in present law.
(b)90% shall be deposited in and credited to the Support Education in Louisiana First Fund.
(2)Beginning Aug. 1, 2018, if the amount received pursuant to present law (R.S. 27:241.1(A))
is greater than $60,000,000 per fiscal year, after satisfaction of the requirements of paragraph
(1) above, all residual monies shall be allocated in the following order:
(a)$3,600,000 shall be deposited in and credited to the Louisiana Early Childhood
Education Fund.
(b)Of the monies remaining after satisfaction of the requirements of paragraph (a)
above, 30% shall be distributed by the state treasurer to the governing authority of
the parish in which the official gaming establishment is located for use in support of
capital infrastructure projects, and 70% shall be deposited in and credited to the
Community Water Enrichment and Other Improvements Fund as the fund is amended
by proposed law.
In this regard, proposed law changes the present law "Community Water Enrichment
Fund" to the "Community Water Enrichment and Other Improvements Fund" to be
comprised of two accounts, the Water System Enrichment Account and the Other
Improvements Account, with each account receiving 50% of the monies deposited
from the portion of the net revenues allocated to the Community Water Enrichment
and Other Improvements Fund as provided by proposed law. Further provides that
monies in the Other Improvements Account shall be used by the office of community
development solely to provide for a grants program for local governments to assist
with capital, infrastructure, and other projects. In this regard, proposed law requires the state treasurer, on the effective date of
proposed law, to transfer all monies in the Community Water Enrichment Fund at the
close of the prior business day for a one-time deposit and credit to the Water System
Enrichment Account as created by proposed law.
(Amends R.S. 27:241(A), 241.1, 243(C), 247, and 270(A)(3) and R.S. 39:100.81)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Administration of Criminal
Justice to the original bill:
1. Amend proposed law to provide that the memorandum of understanding between the
casino gaming operator and the Greater New Orleans Hotel and Lodging Association
dating March 2018 may include, instead of shall include, an authorization to provide an
agreed upon number of additional hotel rooms at a new hotel site.
2. Specify that any action related to the enforcement of memoranda of understanding and
agreements shall be instituted in the Civil District Court for the Parish of Orleans.
3. Add changes to provisions of present law which provides for the distribution of certain
net revenues into specific funds and which provides for the procedure by which the
amount allocated to each fund is determined.
The House Floor Amendments to the engrossed bill:
1. Require the casino gaming operator to make a capital investment of $350,000,000 prior
to the board's approval of the first additional 30-year renewal term and remove the capital
investment from the list of required elements of the first thirty-year renewal term
contract.
2. Provide that adjustments to the amount paid to the La. Gaming Control Board by the
casino gaming operator and the amount paid for casino support services shall be made
every two years, instead of every five years.
3. Make changes to the provisions of proposed law which provide for the distribution of
certain funds to increase the percentage of funds allocated to the Community Water
Enrichment and Other Improvements Fund from 50% to 70% and to decrease the
percentage of funds allocated to the governing authority of the parish in which the
official gaming establishment is located from 50% to 30%.