by Steve Norton
CEO, Norton Management

Casino Smoking Bad for the Body, but No Smoking Bad for Business, Harrah's New Orleans Says

I was the individual that convinced then-Governor Edward, that a single casino in New Orleans would be better for the City, than casino games in every 500 room hotel. My rationale was that a single casino could afford a more spectacular attraction that having Puerto Rico-style gaming in multiple properties.

The plan which was approved by a Legislative Committee, after testimony by the Governor, Mayor Bartholomew and myself; proposed a $100 million minimum tax; 4 gourmet restaurants (operated by existing NO restaurateurs), coffee shops and a buffet and two showrooms. One was for a risque review show, performing nightly; and a second large showroom for major performers and events to small for the Super Dome.

The selected site was the Levy, between the Hilton and the French Market; where the aquarium resides today. And with hotel occupancies suffering badly, after the 1984 Worlds Fair, my proposal had no rooms, but a 2,500 car garage. The year was 1987, before gaming in Mississippi or riverboats in Louisiana, and the Governor was running against another Democrat, Buddy Roemer. The bill died in the House; and I was hired by the Delta Queen Steamboat Company, to help the Legislature and State Police, pass the Riverboat bill in 1991-92, which was successful.

But Edwards won the following election, and brought back the New Orleans Casino issue in 1992, before approving the Casino Commissioners. The Legislature agree to reintroduce the 1987 bill, but forgot to reduce the minimum tax of $100 million, which needed to change because of the new competition in Mississippi and LA riverboats. Now the permanent casino is in the old convention hall, the State has adjusted the tax rate; but have now placed the non smoking restriction, costing the operator and State in revenues and taxes.

There is a simple solution available if smoking rooms are allowed in the casino, but only smoking employees are allowed to work there. Second hand smoke is not an added health concern for someone who smokes. Harrah's has done the best they can with outdoor gaming, but in the Louisiana climate, heat and rain are real issues, and have not stopped the loss of revenues or taxes.

When I prepared a study on the smoking impact on the 4 Greater Chicago riverboats in Illinois, I found a negative impact in year one of a 21.8%% decline in win, a 32.8% decline in taxes, 14.1% fewer admissions (with smoking allowed on Indiana riverboats in adjacent east Chicago, Hammond and Gary. Ant the win per admission down 9.0%; a very large impact, when in the US, only 15% of adults smoke. Two years later (2010) before a 5th casino opened and voided fair comparisons, the win was down 35.5%. taxes 48.1%, attendance 24.4% and win per attendance down 14.7%

Harrah's is fortunate that their win is not down even further, probably because the LA riverboats are limited in casino size, and in harder to reach locations, plus the French Quarter, Super Dome and thousands of hotel rooms are more convenient to a downtown location.

My employer, Resorts International Inc. also owned Intertel, an International Company that provided Howard Hughes and many forewing governments. Intertel's Chairman, Robert Peloquin had previously met Governor Edwards, and the Company was hired to determine whether Dog Racing or a casino would carry the debt service of the new Super Dome. It was 1977, when Resorts was preparing fo r gaming in Atlantic City, but I took a break to help Intertel with the financial part of the projections, and I worked with Charles Roemer, Buddy's Father, and Secretary of Administration for Governor Edwards. Unfortunately the Legislation to put a casino in the Dome did not succeed, but it provided me with an introduction to Governor Edwards, that prompted my follow up with Governor Edwards 16 years later. .