Monday, June 24, 2002 | 9:49 a.m.
NEW ORLEANS -- Ten years after Louisiana's legislature created the New Orleans casino amid promises the city would benefit from gambling, the reality is far different.
Harrah's New Orleans Casino is taking in only a fraction of the money promoters predicted would be spent at the huge new casino near the French Quarter.
Pro-gambling bumper stickers once talked about 50,000 new jobs from the casino -- but the gambling hall itself employs 2,500 and won a tax break from lawmakers last year after threatening bankruptcy.
Part of the casino's problem comes from stiff competition from the popular gambling outlets along Mississippi's Gulf Coast.
Louisiana's riverboat casinos in Shreveport and Lake Charles have become the state's primary destination points for gamblers, most of them from Texas.
"What we've probably learned is that if you want to legalize gambling because you want it to be economic development, you're probably making a mistake," University of New Orleans economist Tim Ryan said.
Longtime casino opponent C.B. Forgotston said the story of Harrah's shows that "gambling dollars are finite."
"We've finally realized that there is a limited number of dollars that can be spent on gambling," he said.
Ten years ago last week, Louisiana lawmakers passed the land casino bill with no votes to spare and then-Gov. Edwin Edwards signed it into law.
Edwards touted the idea of a New Orleans casino during the 1980s as a unique tourist attraction that would draw gamblers from all over the country.
At the time, casinos were limited largely to Nevada and Las Vegas. But by the time the law was passed, riverboat casinos were popping up in other states and Mississippi had shocked many observers by legalizing dockside gambling.
A temporary casino at New Orleans's Municipal Auditorium lasted only six months before it collapsed into bankruptcy court in 1995.
The permanent casino finally opened in late 1999, but threatened to close in early 2001 and file for bankruptcy reorganization again.
To keep the casino open, lawmakers cut the casino's annual minimum tax from $100 million to $50 million. Now it's been raised slightly to $60 million.
Control of the casino's ownership company, JCC Holding Co., is being fought by former bondholders and Harrah's Entertainment Inc. of Las Vegas, which manages the gambling hall.
Forgotston writes off the land casino as an unsuccessful attempt to generate instant economic prosperity in a city stricken by grinding poverty.
"About every 10 or 12 years, New Orleans can be fooled by a snake oil salesman," he said. "The only question is when he will show up again or if he has shown up, and whether we will ever learn the lesson that there is no easy way to economic development."
archive
