Louisiana Casino Tax Relief Bill Passes Legislature, Gov. Edwards Expected to Sign

admin 26th June 2020

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A Louisiana casino tax relief bill has been approved in both chambers of the state legislature, and now heads to Governor John Bel Edwards’ (D) desk for final approval.

Gov. John Bel Edwards seen at re-election campaign. — Should Gov. Edwards, seen here during his re-election campaign in 2019, sign casino relief legislation coming to his desk, Golden Nugget Lake Charles and other Louisiana casinos would be able to provide their guests with promotional gaming credits and not have to pay taxes on associated revenue. (Image: Matthew Hinton /AP)

Sen. Ronnie Johns (R-Lake Charles) introduced Senate Bill 5 earlier this month in an effort to help the state’s 15 commercial casinos recover from the economic impact of COVID-19. Should the governor sign the legislation, the 14 riverboats and the land-based Harrah’s New Orleans casino wouldn’t pay taxes on up to $5 million in promotional gaming credits handed to gamblers.

Promotional play, such as free slot spins, accounts for about 10 percent of the annual gross gaming revenue (GGR) won by the Louisiana casinos. Exempting the tax on that revenue, state lawmakers in support of the legislation say, will allow the casinos to recover quicker and, ideally, protect jobs. It’s expected to save the casinos $83 million over the next five years.

GGR won from non-promotional credits would remain subject to the state’s 21.5 percent rate. Additional local taxes vary by region.

Louisiana’s gaming industry employs almost 20,000 people. But Boyd Gaming, owner and operator of Sam’s Town, Treasure Chest, and Amelia Belle, plus two racinos, recently announced that approximately 1,500 positions could be terminated as a result of the coronavirus and trimmed-down operations. DiamondJacks also isn’t reopening, putting another 400 people out work.

Riverboat Gaming Sinks

Edwards ordered all Louisiana casinos to close on March 22. The governor permitted casinos to reopen on May 18 at 25 percent occupancy.

But total GGR plummeted during May despite the reopening. The 14 boats won $60 million – down 62.5 percent, or nearly $100 million, compared with May 2019. Harrah’s New Orleans only opened on June 13. The casino floor won $26.4 million in May of 2019.

Ten of the riverboats opened on May 18 (Eldorado Resort, Horseshoe, Margaritaville, Isle Lake Charles, L’Auberge LC, Golden Nugget LC, Boomtown, Belle of Baton Rouge, Hollywood BR, and L’Auberge BR). Treasure Chest and Boomtown Bossier opened two days later, and Sam’s Town and Amelia Belle opened May 27.

Controversial Bailout

Not everyone in the Baton Rouge capital supported reducing the tax liability for casinos.

The state’s riverboats won more than $892.6 million last year, and Harrah’s New Orleans $143.2 million. With casino revenue topping $1 billion in 2019, some lawmakers believe the industry is more than capable of weathering a pandemic.

Sen. Karen Carter Peterson (D-New Orleans) additionally opined that allowing casinos to lure in gamblers with free money that the house then doesn’t need to pay taxes on is a dangerous initiative for those prone to gambling problems.

Johns countered that the casinos are “on their heels right now from COVID,” and “this is one tool that we can give them.”

Sen. Jay Luneau (D-Alexandria) said that while he typically opposes such tax breaks, “This is one that legitimately works.” The Senate voted 26-8 in favor of SB5, with five senators abstaining. The House passed the measure 73-19, with 12 abstaining.

The post Louisiana Casino Tax Relief Bill Passes Legislature, Gov. Edwards Expected to Sign appeared first on Casino.org.

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