Las Vegas Sun

March 29, 2024

Trapped between conflicting orders: Close and leave; stay and gamble

The city of New Orleans, which won Monday's surprise order to keep the boat open, and the Flamingo's owners both said they would go to court today in Baton Rouge.

"We are going to have to go back and talk to our attorney and figure out what action we are going to take," said Duane Smith, spokesman for New Orleans Paddlewheels.

The 19th Judicial District in Baton Rouge has jurisdiction over state gambling control.

City officials said they would file suit there to stop the Louisiana Gaming Control Board's order to close the casino by midnight tonight, when its license expires.

Gambling board chairman Hillary Crain said no legal action had been filed against the regulating body Monday. And he said his order stands.

"We've ordered them to close, and that's all we have to say," Crain said. "They can take whatever legal action they want to."

It was a question of taxes that was before State Civil District Judge Ronald Sholes in New Orleans when ordered the casino to stay open even after midnight.

Sholes also ordered the boat to stay in New Orleans unless the Coast Guard orders it to leave.

The city claims the Flamingo owes it $3.5 million in sales taxes from the past two years. Last week, in a maneuver to recoup the money, the city froze some accounts of New Orleans Paddlewheels - a 50-50 partner in the Flamingo with Hilton Hotels Corp.

That made about 800 casino paychecks bounce on Sept. 19.

If the casino obeys Sholes and stays open in New Orleans, it will violate the gambling board's orders and risk losing its gambling license permanently.

The board told the Flamingo it cannot stay in New Orleans and must close by Oct. 1.

"If they continue to gamble, they would be gambling without a license," said Anne Neeb, lawyer for the state gambling board. "They do not have a license after midnight. They would suffer any enforcement action."

Flamingo officials had originally planned to shut down the boat by noon Tuesday, 12 hours before their license at the New Orleans berth expired.

The ruling brought a glimmer of hope to the 700 people who would be out of jobs when the casino closes.

"I'd like to keep my job," said casino worker Danna Sambio. "I don't want to lose it."

The Flamingo would have been the fourth riverboat casino to close in Orleans Parish. in the short era of legalized casino gambling in Louisiana. The Flamingo started with a small boat, brought in a much larger vessel, then brought back the smaller casino after the expected crowds failed to materialize.

Its owners hope to find it a home in Shreveport-Bossier City, where Texans pour across the border to wager. The Flamingo was slated to move to Shreveport, but that deal fell apart after Hilton decided it did not want to invest tens of millions of dollars to build a hotel there.

Louisiana's first riverboat, the Star Casino, opened in New Orleans in October 1993, but closed in 1995 and moved to Lake Charles following a dispute over dockside gambling.

The Flamingo's closure would leave Orleans Parish with only one floating casino, Bally's, which took the Star's berth on Lake Pontchartrain. There also are two suburban casinos: Boomtown Belle in Harvey and the Treasure Chest in Kenner.

The judge's order came after hours of negotiation between attorneys for the city and New Orleans Paddlewheels.

Where attorneys couldn't agree, Sholes filled the gaps with orders. Among them:

- Paddlewheels Inc. will deposit $400,000 with the court to be held until the delinquent tax claim is resolved.

- The city will release the frozen $1 million, freeing the money to pay casino vendors and employees.

- A $6 million Queen of New Orleans joint venture account is to be turned over to the court until all issues are settled. Paddlewheels President Duane Smith said the $6 million is capital to be invested in the Shreveport location.

Paddlewheels agreed to dismiss its lawsuit claiming the city unlawfully seized its the $1 million.

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