Riverboat industry willing to pay a little to get dockside gambling

Guy Coates

Wednesday, May 3, 2000 | 3:19 a.m.

BATON ROUGE, La. - Most of the riverboat gambling industry is willing to pay a little more tax if the boats can stop cruising and become landlocked casinos.

The boats would do much better financially if the Legislature would approve dockside gambling. The industry could pay 1.2 percent more of its gross revenue, said Tom McPherson of Bally's. Now, the state tax is 18.5 percent.

McPherson told the House Ways and Means Committee Wednesday that he represented all the owners but Hollywood and Horseshoe casino operations.

The committee has at least 10 pieces of legislation that would raise the tax by as much as 5 to 10 percent. A number of the bills would not grant dockside gambling.

Now, boats are required to cruise when weather conditions allow and a number of gamblers would rather stay at dock, most everyone has agreed.

The industry came armed with information and had facts on just about everything but the boats' profit margins.

But, the profits are healthy when taxes paid to the state are considered, gambling critics have often stated.

The boats paid the state $258 million in taxes last year. Since 1994, the boats have paid the state over $1.2 billion, said industry representatives.

The figures are based on the operations of 13 riverboats. A 14th goes on line in a few months. The 15th and final license will probably be granted by the end of the year or early next year.

Rep. Mitch Landrieu, D-New Orleans, said information on profit margins is "critical" if he is to vote on a gambling tax. "Maybe 1.5 percent is not enough," he said.

The committee will not take votes on any tax measure until the House Appropriations Committee gets a clearer picture of the proposed $13.8 billion budget for the fiscal year beginning July 1. The committee has been meeting daily, looking at each budget item.

The Legislature cannot, by law, approve dockside gambling in a fiscal session. In addition, the Legislature cannot approve dockside unless it changes the contract with the landbased casino in New Orleans.

The New Orleans casino must pay the state $100 million a year. For that payment, the casino gets the exclusive right to operate as a landbased casino. Dockside, in effect, creating landbased casinos of riverboats, would be in violation of the contract.

A number of legislators believe they will be asked to lower the New Orleans casino tax since that facility is having a difficult time breaking even.

The riverboat industry is backing several bills in which the 1.2 percent tax would not go into effect until dockside gambling is approved, said McPherson.