Las Vegas Sun

March 28, 2024

Panel delays vote after N.O. casino layoffs

NEW ORLEANS -- A day after Harrah's New Orleans Casino, the recipient of a major tax break from the state four months ago, fired 148 employees, the city decided Wednesday to delay considering a $5 million annual reduction in lease payments.

Citing overstaffing in its table games section, the casino laid off the workers Tuesday. The casino said the reduction, along with the removal of 11 of 110 table games, brought the gambling hall into line with a national trend of gamblers being more interested in playing slot machines.

The move was greeted icily by members of a City Council subcommittee, who had been expected earlier to approve a cut in casino payments to New Orleans from $10 million to $5 million.

The city had agreed to take the cut to gain legislative support for Harrah's state tax reduction from $100 million to $50 million annually, along with state permission for the hotel to have expanded restaurants and its own hotel with discounted rooms.

"The justification for a casino in New Orleans was never gambling, but jobs and revenue for the city," said City Council member Troy Carter, who chairs the subcommittee. "The reason for granting relief was to avoid layoffs."

Committee members wanted to know if the casino's ownership company, JCC Holding Co., knew that layoffs would be needed while the concessions package was being negotiated with the state and city.

Fred Burford, the official largely in charge of the talks, recently left JCC Holding in a major restructuring under which Harrah's Entertainment Inc. took more direct control of the gambling hall. The chief overseer now is Anthony Sanfilippo, a division president for Harrah's, who arrived on the project in mid-April after the relief was passed.

"I can't answer that," Sanfilippo said. "I don't want to say that I wasn't the guy here, but I don't know what the process was at that time."

Sanfilippo said he concluded after an extensive analysis of all the casino's operations that Harrah's was overstaffed in the table games section. He said he chose the announcement date partially so the city would know about the layoffs before a formal vote was taken on the city payment reductions.

"I don't want to say it can't happen again," Sanfilippo said. "But I only want to do this once."

Sanfilippo said the casino needed to get its staff at the right size before it could proceed with such projects as developing the building's second floor and obtaining a hotel.

Carter said the city and JCC Holding mutually agreed to put off a vote for four weeks so the city can study the layoffs further. According to casino officials, employment is still above the numbers required by the state and city.

The legislator who pushed successfully for an employment minimum said in a Wednesday interview that "the timing could not have been worse" for layoffs.

"They should have made a greater effort to retain those people since they just got that big tax break. I don't think it shows good faith. It doesn't do much for their credibility in the community," said Sen. Diane Bajoie, D-New Orleans.

According to the law, the casino cannot cut more than 10 percent of its staff from a benchmark employment figure set in March. That minimum number is 2,465. Currently, the casino employs 2,575. The city has an employment minimum of 2,550.

It is not clear what the effect of the casino dropping below those minimums would be. Casino officials said Tuesday that dropping below the state minimum could potentially jeopardize the gambling hall's license. Dropping below the city minimum would require enhanced placement services for dismissed employees, they said.

City Council member Eddie Sapir said he wanted to work with the casino to make it successful, but the timing of the layoffs "makes this entire community wonder about your organization."

Bajoie said: "I'd hate to see what might have happened if that limit hadn't been put on there."

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