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 544 Engrossed 2019 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 require 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)Prior to July 15, 2024, the casino gaming operator making a capital investment on or around
the official gaming establishment of $325,000,000, subject to an extension for any force
majeure event.
(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.
(4)Approval by the New Orleans City Council, the mayor of the city of New Orleans, and the
casino operator of all matters necessary to implement the provisions of the extension.
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, 2019, the casino gaming operator
shall annually pay the governing authority directly to compensate the parish for providing
support services. Beginning Aug. 1, 2019, the annual payment, payable in quarterly
installments, shall be equal to $6,000,000. Beginning on Aug. 1, 2024, 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 but provides that for fiscal year April 1, 2002 through
March 31, 2022, the minimum compensation to be paid by the casino operator to the La.
Gaming Control Board shall be the greater of eighteen and one-half percent of gross revenues
or $60,000,000; and that for fiscal year April 1, 2022 and for each fiscal year thereafter, the
minimum compensation to be paid by the casino operator to the La. Gaming Control Board
shall be the greater of eighteen and one-half percent of gross revenues or $65,000,000. In addition to this existing obligation, as modified by proposed law, proposed law provides
that beginning October 1, 2019, and concluding July 1, 2054, 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, 2024, 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.
(3)Require the casino operator, beginning casino fiscal year April 1, 2022, and each casino
fiscal year thereafter, to pay an annual license payment of $3,000,000 to the La. Gaming
Control Board.
(4)Require the casino operator to pay a sum of $25,000,000 to the state and to the city of New
Orleans. Seventy percent shall be paid to the state and thirty percent shall be paid to the city
of New Orleans no later than ten days after all of the following occur:
(a)Approval by the Joint Legislative Committee on the Budget of the amended casino
operating contract.
(b)Approval by the New Orleans City Council of an amended lease that reflects the
parties' mutual understanding and economic development requirements consistent
with present and proposed law.
(c)The execution of the amended casino operating contract reflecting the renewal of the
contract through July 2054.
(5)Require the casino operator, at such time as the option holder exercises, prior to October 1,
2020, its call option to the leasehold interest in the official gaming establishment, to pay a
sum of $40,000,000, with 70% of which being paid to the state and 30% of which being paid
to the city of New Orleans, in three installments as follows:
(a)$20,000,000 to be paid no later than 10 days after the exercise of the call option if the
following conditions have been fulfilled at the time of the exercise of the call option,
or if the conditions have not been fulfilled at the time of the exercise of the call
option, payment shall be made no later than 10 days after the fulfillment of the
following conditions:
(i) Approval by the Joint Legislative Committee on the Budget of the amended
casino operating contract.
(ii)Approval by the New Orleans City Council of an amended lease that reflects
the parties' mutual understanding and economic development requirements
consistent with present and proposed law, and all approvals necessary for the
assignment of the lease of the official gaming establishment or sublease to option holder provided that there are no further requirements for
remuneration to be paid or further concessions to be made by the casino
operator or the option holder to the city of New Orleans in connection with
the approval of the assignment of the lease of the official gaming
establishment or sublease to the option holder except as provided in present
and proposed law.
(iii)The execution of the amended casino operating contract reflecting the
renewal of the contract through July 2054.
(b)$10,000,000 on the first anniversary of the date on which the first payment was
made.
(c)$10,000,000 on the second anniversary of the date on which the first payment was
made.
(6)Require the casino operator, if the call option to the leasehold interest in the official gaming
establishment is not exercised by October 1, 2020, to pay a sum of $40,000,000, with 70%
of which being paid to the state and 30% of which being paid to the city of New Orleans, in
three installments as follows:
(a)$20,000,000 to be paid no later than 10 days after October 1, 2020.
(b)$10,000,000 on the first anniversary of the date on which the first payment was
made.
(c)$10,000,000 on the second anniversary of the date on which the first payment was
made.
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, 2019, 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 operator may offer food and restaurant facilities at or in the vicinity of the official gaming establishment consistent with the terms of any agreement between the casino
operator and the Louisiana Restaurant Association and its successors, as such agreement may
be amended from time to time.
(2)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.
(3)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.
(4)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 April 2019, 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 April 2019, shall provide for certain
restrictions, relative to advertising of market rates and payment of room taxes by the
casino operator, for rooms that exist prior to August 1, 2018, and restrictions in the
same regard that apply only to the additional rooms authorized by the MOU and
agreement. For additional hotel rooms authorized by the MOU and agreement dated
April 2019, the casino operator is required to pay room taxes on all discounted and
complimentary rooms at applicable tax rates based upon average seasonal rates for
the preceding year of luxury hotels in the Central Business District, French Quarter, and Warehouse District.
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, 2019, through March 31, 2022, 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, 2019, through March 31, 2022, 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.
(3)Beginning April 1, 2022, if the amount received pursuant to present law (R.S. 27:241.1(A))
is $65,000,000 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.
(4)Beginning April 1, 2022, if the amount received pursuant to present law (R.S. 27:241.1(A))
is greater than $65,000,000 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.
(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. With respect to room taxes on discounted and complimentary rooms, remove the
limitation that the casino operator pay only the portion of room taxes dedicated to local
tourism funds.