Regulator: Boats will be asked to explain lack of sailing

Monday, June 30, 1997 | 11:03 a.m.

The issue has been tossed back into the tangle of Harrah's Jazz Co.'s failure to win legislative backing for a new contract for its New Orleans casino.

Under that contract, Harrah's Jazz agreed that dockside gambling in Orleans Parish would not be a breach of its monopoly - and therefore would not be grounds for failing to pay the state taxes. Harrah's Jazz now wants a bankruptcy judge to approve a new reorganization plan with no such agreement.

However, the head of the Louisiana Gaming Control Board said the issue had been under study for several months before the Legislature refused to approve the new state contract.

"We're going to be taking it up. We're going to be considering each and every boat individually," board chairman Hillary Crain said.

The possible conflict with the land casino affects only two riverboats - Bally's and The Flamingo, both in New Orleans. However, all riverboats are required to cruise except for the four on the Red River in Shreveport-Bossier City.

The cruising requirement is supposed to apply to the New Orleans boats, two that operate in Jefferson Parish, two in Baton Rouge and four in Lake Charles.

The Flamingo, has received gambling board approval to move from New Orleans to Shreveport and join Harrah's riverboat in a joint casino-hotel project. Crain has said The Flamingo must shut down gambling in New Orleans on Oct. 1 - long before the land casino could open.

The cruising study will affect all boats outside of Shreveport-Bossier City, Crain said.

"We've been doing a boat-by-boat investigation for the past six months and trying to get a handle on what's going on," Crain said.

Crain said he was not prepared to release current statistics on how many scheduled cruises are being made. However, a state police report issued in early March said the four boats in the New Orleans area were making only a fraction of their cruises.

Although there have been past enforcement efforts, the problem stems from a state provision that allows a boat's captain to refuse to sail for safety or weather-related reasons.

The dockside issue predates the creation of the Louisiana Gaming Control Board in May 1996. Before then, riverboats and the New Orleans land casino were governed by separate boards.

Crain said that state police are compiling sailing records, and each riverboat that is required to cruise will be called before the board to explain its record. After that, the board will decide what action to take, he said.

Although the board has a meeting scheduled for July 10 in Baton Rouge, the cruising issue probably will not be taken up then, Crain said. The main item that day probably will be The Flamingo's plan to move to Shreveport, he said.