ATLANTA -- Lawmakers in cash-strapped Louisiana, hoping for an infusion of new revenues, have granted final approval to a bill that would permit casino gambling in New Orleans.
The legislation, which is almost certain to boost similar efforts in other states, represents a major victory for Gov. Edwin Edwards, who has long sought the measure.
"I firmly believe that the $200 million in anticipated revenues will go far towards helping us provide a better state government and better state services for people throughout Louisiana, and diminish the need for us to continually raise taxes and cut the budget," Gov. Edwards said at a press conference held Friday.
Approval of the casino bill will not help state lawmakers resolve the budget strains Louisiana faces during its 1993 fiscal year, which begins July 1. Those strains may require cuts of $300 million from existing spending.
But as early as the 1994 fiscal year, revenues from the casino tax could begin to flow to the state.
Rating agency officials said passage of the legislation could eventually help Louisiana deal with its fiscal problems. They added, however, that care must be taken to avoid reliance on gambling levies, which are often difficult to predict. They also said the social costs of gambling must be taken into account.
"Any relief Louisiana gets in terms of revenue pressures is a plus," said Robert Swerdling, a director at Standard & Poor's Corp. "But the state must be reasonable in its expectations of revenues from this source, and it must continue to address the structural basis of its budgetary imbalances."
Said George Leung, managing director of state ratings at Moody's Investors Service. "Our immediate concern continues to be the 1993 budget. In evaluating this legislation, we will need to review the social costs of legalization of the casino gambling as well as its possible revenue impact. We continue to look for the state to develop stable and reliable revenue sources."
In its final version, the bill passed last Thursday by the state Senate imposes an annual state casino tax of either 18.5% of gambling revenues, or $100 million, whichever is greater. The bill authorizes only one location for construction of a casino building, the Rivergate Convention Center site, which is located near New Orleans's French Quarter.
The bill also establishes the Louisiana Economic Development and Gaming Corp., to be run by a nine-member state board chosen by Gov. Edwards. After the board chooses the casino operator, it will then negotiate a lease with the city, which owns the Rivergate Convention Center site.
Although the city will receive payments for added police and fire services necessitated by the casino, it will not receive a direct share of tax revenues from the facility.
Supporters of the legislation have said the casino would help the state improve its finances and bring between 15,000 and 25,000 jobs to New Orleans. Planners estimate that when the giant casino is completed, it will draw an estimated 20,000 people a day and provide about $5 million in annual rent payments to the city.
Opponents have complained that the bill prevents New Orleans from having any control of the casino and that such a gaming center would increase crime in the city. An amendment to the bill that would have required city voters to approve the measure before it could become law was defeated in the Senate on Thursday.
Secretary of State Fox McKeithen has said he is considering filing a lawsuit simply to clarify the casino's legal status.
Passage of the casino legislation in Louisiana could also give a boost to similar initiatives in other states where officials are eager to tap new revenue sources, Mr. Swerdling said.
"As more states adopt casino gambling, I think there will be pressure on states considering it to follow suit," Mr. Swerdling said.
Last Wednesday, a gaming panel appointed by Mayor Richard M. Daley of Chicago unanimously recommended that both the city and Illinois pursue casino gambling to attract jobs and new tax revenues. The panel said a single-site casino complex would create more than $500 million in annual tax revenues for the state. The legislature would have to approve land-based gambling. Illinois's Gov. Jim Edgar has voiced strong reservations about such a venture.
Besides Chicago, casino proposals are pending in at least four other U.S. cities: Gary, Ind.; Andelanto, Calif.; and Bridgeport and Hartford, Conn.
Officials in Gary will continue to push for casino gambling even though the state legislature last year turned down a casino proposal, according to Gary Johnson, director of the city's Office of Economic Development.
In California, officials in the small city of Adelanto are trying to place a statewide referendum on the ballot authorizing a Las Vegas-style casino.
In Connecticut, casino gambling has been advocated in Hartford and Bridgeport, despite the opposition of Gov. Lowell Weicker.