RÉSUMÉ DIGEST
ACT 171 (HB 544) 2019 Regular Session Barras
The existing 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 existing 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 existing 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.
New law amends existing 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.
New 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 new 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, prior law required 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 was 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 was paid from the Casino Support
Services Fund, specifically created for this purpose.
New law repeals 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 August 1, 2019, the casino gaming operator shall
annually pay the governing authority directly to compensate the parish for providing
support services. Beginning August 1, 2019, the annual payment, payable in
quarterly installments, shall be equal to $6,000,000. Beginning on August 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 new law, in addition to the
existing law obligations to remit to the Louisiana Gaming Control Board any fees or
compensation.
In this regard, existing law (R.S. 27:241.1) provides that effective midnight March
31, 2001, the minimum compensation to be paid by the casino operator to the La.
Gaming Control Board shall be the greater of: (i) 18½ 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.
New law retains existing 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 18½ 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 18½ percent of gross revenues or $65,000,000.
In addition to this existing obligation, as modified by new law, new law provides that
beginning October 1, 2019, and concluding July 1, 2054, the casino gaming operator
shall annually pay to the state the sum of money equal to $3,400,000, which shall be
used solely for the purpose of providing funding to the La. Cancer Research Center
of the LSU Health Sciences Center in New Orleans/Tulane Health Sciences Center.
Beginning on August 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 to the La. Gaming
Control Board of $3,000,000, of which $500,000 is required to be deposited in and
credited to the Compulsive and Problem Gaming Fund established in existing law.
(4)Require the casino operator to pay a sum of $25,000,000 to the state and to the city
of New Orleans. 70 percent shall be paid to the state and 30 percent shall be paid to
the city of New Orleans no later than 10 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 existing law and new 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 percent of which being paid to
the state and 30 percent 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 existing law and new 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 existing law and
new 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 percent of which being paid to the state and 30 percent 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.
Existing 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. Existing law
further provides certain restrictions on the casino gaming operator relative to such operations
and activities, including restrictions on pricing and advertising.
Existing 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.
New law amends provisions of existing law to provide that beginning August 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 La. 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 new 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, new 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 existing law and
new 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 hotel rooms added after
2019 and 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.
Existing 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.
Prior law provided that such net revenues shall be deposited as follows:
(1)In each year for which the Joint Legislative Committee on the Budget disapproved
or did not act upon the amount of the casino support services contract, no monies
were deposited in and credited to the Casino Support Services Fund:
(a)10 percent shall be deposited in and credited to the Support Education in La.
First Fund and used solely and exclusively for specific purposes provided in
existing law.
(b)90 percent shall be deposited in and credited to the Support Education in La.
First Fund.
(2)In each year for which the Joint Legislative Committee on the Budget approved 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 La. 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 La.
First Fund.
In this regard, new law amends prior law to provide for the allocation and distribution of
such net revenues as follows:
(1)Beginning August 1, 2019, through March 31, 2022, if the amount received pursuant
to existing 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 percent shall be deposited in and credited to the Support Education in La.
First Fund and used solely and exclusively for purposes provided in existing
law.
(b)90 percent shall be deposited in and credited to the Support Education in La.
First Fund.
(2)Beginning August 1, 2019, through March 31, 2022, if the amount received pursuant
to existing 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 La. Early Childhood
Education Fund.
(b)Of the monies remaining after satisfaction of the requirements of paragraph
(a) above, 30 percent 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 percent
shall be deposited in and credited to the Community Water Enrichment and
Other Improvements Fund as the fund is amended by new law.
In this regard, new law changes the existing 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 percent of the monies deposited from the portion of the
net revenues allocated to the Community Water Enrichment and Other
Improvements Fund as provided by new 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, new law requires the state treasurer, on the effective date of
new 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 new law.
(3)Beginning April 1, 2022, if the amount received pursuant to existing 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 percent shall be deposited in and credited to the Support Education in La.
First Fund and used solely and exclusively for purposes provided in existing
law.
(b)90 percent shall be deposited in and credited to the Support Education in La.
First Fund.
(4)Beginning April 1, 2022, if the amount received pursuant to existing 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 La. Early Childhood
Education Fund.
(b)Of the monies remaining after satisfaction of the requirements of paragraph
(a) above, 30 percent 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 percent
shall be deposited in and credited to the Community Water Enrichment and
Other Improvements Fund as the fund is amended by new law.
In this regard, new law changes the existing 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 percent of the monies deposited from the portion of the
net revenues allocated to the Community Water Enrichment and Other
Improvements Fund as provided by new 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.
Effective August 1, 2019.
(Amends R.S. 27:241(A), 241.1, 243(C), 247, and 270(A)(3) and R.S. 39:100.81)