Harrah’s seeks assistance as it adjusts to city’s smoking ban
19th October 2015 · 0 Comments
By Susan Buchanan
Contributing Writer
According to City Hall, a smoking ban imposed on bars and casinos in late April has gone well enough. But operators of Harrah’s New Orleans casino on Poydras Street feel differently. Owned by Caesars Entertainment, Harrah’s generates huge gaming taxes for the state and makes lease payments to the city.
The city’s preparations for the ban paid off. “Because of a strong education campaign, we haven’t had to issue any fines since the Smoke-Free Ordinance went into effect,” Charlotte Parent, director of the city’s health department, said last week. “Most businesses are in complete compliance.” Last spring and summer, her department provided ban-related resources to local businesses and workers.
But Harrah’s is far from satisfied, pointing to lost revenue since April while earnings at nearby Jefferson Parish casinos—where smoking is allowed—have risen. Harrah’s wants permission to reduce its local staff from a state-mandated level set over a decade ago. To boost earnings and accommodate smokers, Harrah’s this summer asked the New Orleans City Council and the city’s planning commission if it could build outdoor courtyards with slot machines.
But as of mid-October, the City Council hadn’t scheduled a hearing on the courtyards, and an okay from the planning commission looked unlikely anytime soon. “On August 31, we filed a land-use application, seeking an amendment to the existing conditional use, to build two smoking courtyards on casino property,” Cara Hall, New Orleans-based corporate counsel for Caesars, said last week. “The land-use application was on course to be heard before the city planning commission on October 13. Unfortunately, it was deferred.”
Hall said the planned build project is relatively small, and would relocate two temporary smoking areas to more secure, permanent spots. A courtyard of roughly 1,900 square feet would be constructed on the South Peters Street side of the casino, and a second one of about 750 square feet would be on the Convention Center Boulevard side.
“Pending approvals, we hope to place limited slot machines in the courtyards to help offset a revenue decline since the Smoke-Free Act went into effect,” Hall said.
But under the plan, these machines would in fact be numerous. Harrah’s has proposed placing 62 gaming devices, virtually all slots, in the South Peters courtyard and another 25 devices in the Convention Center yard. That many slots suggests the yards could be full of patrons puffing away on weekends and evenings, possibly sending smoke out to sidewalks and streets.
And might those outdoor gamblers—perceived as having cash on them—be targeted by street thugs, especially given the city’s rash of armed robberies? Hall said that only patrons who have come into Harrah’s through its main casino entrances would be able to reach the outdoor yards. “These courtyards wouldn’t be accessible from the street and parking areas,” she said.
“Both courtyards will have appropriate surveillance, consistent with the rest of the property,” she said. “They will provide a secure area, where guests can comfortably smoke in compliance with the indoor ban.” Guest and employee safety is the company’s top priority, while another emphasis is aesthetics. “The courtyards will blend in seamlessly and organically with the casino premises,” she said. “They’ll actually improve the appearance of the existing structure. But like most courtyards, there will be some exposure to the elements,” or local weather.
As it loses revenue, the casino isn’t happy about the mandated size of its local workforce. “Earlier this year, Harrah’s New Orleans and some of its employees requested that the state revisit a 15-year-old requirement that Harrah’s at all times maintain 2,400 employees,” Hall said. “That requirement is based on laws and operational realities in 2001,” following the casino’s opening in 1999.
Since then, “numerous changes have occurred in the casino industry, technology, and laws and regulations that impact Harrah’s,” she said. Over that span, Louisiana has stiffened its gaming-operations laws several times. In today’s environment, paying a staff of 2,400 is “extremely burdensome and unmanageable,” she said.
In May, Harrah’s New Orleans asked for, but didn’t get legislative permission to cut 400 jobs. Hall said if the state were to approve a smaller workforce eventually, Harrah’s is committed to reducing its staff through attrition, rather than layoffs. Though she didn’t say so, one possibility is that the state legislature might take another look at the casino after Louisiana’s next governor takes office in January.
While earnings have declined at Harrah’s New Orleans since April, “casinos in neighboring Jefferson Parish and the state of Mississippi, have experienced commensurate revenue increases,” Hall said. In addition to Jefferson, smoking is permitted at Mississippi’s gambling venues.
Harrah’s gaming revenue fell, versus a year earlier, in May, June and August but rose in July and September, according to the Louisiana Gaming Control Board. Earnings were down in that five months as a whole. Revenue at Jefferson Parish casinos—Boomtown in Harvey and the Treasure Chest in Kenner—rose during the same period.
Pinnacle Entertainment, Boomtown’s owner, isn’t playing up its smoking aspect, however. “We attribute Boomtown’s success to our exceptional guest service, our brand new $20 million, 150-room hotel, and our strong marketing strategy,” Boomtown spokeswoman Julie Donald said last week.
Boyd Gaming didn’t respond to requests last week about the Treasure Chest’s recently higher earnings.
Asked if Pinnacle Entertainment has outdoor smoking facilities at any of its casinos, Donald said Belterra Park in Cincinnati, Ohio and Ameristar Casino Resort Spa in Black Hawk, Colorado both have smoking terraces. Ohio and Colorado prohibit smoking at land-based casinos.
Since the New Orleans ban at bars and casinos started in April, the city’s health department has received smoking complaints for 30 businesses to date. The department sent letters to owners, telling them how to comply. It received second complaints for four of those 30 businesses. After the four were inspected, their owners brought them up to code.
Cara Hall said Caesar’s hopes the New Orleans City Council and planning commission will approve courtyards at Harrah’s soon. “It’s important for our business and the city to accommodate the needs of our smoking patrons and to address safety issues that can arise with patrons flocking to the nearest exits to smoke,” she said.
Harrah’s New Orleans paid the state $73.5 million in taxes on gross gaming revenues in calendar 2014. Since it opened in 1999, the casino has dished out more than $1.1 billion in gaming taxes to the state and paid the city over $280 million for its lease.
A small number of casinos in Caesars’ network are completely smoke-free, Hall said. The Las Vegas-based company has 40 casinos and resorts in the United States and Canada, including seven that are non-smoking and others with zones for smokeless gaming. In Bossier City, Harrah’s operates the Louisiana Downs and Horseshoe Casino, where patrons can light up on the gaming floor.
This article originally published in the October 19, 2015 print edition of The Louisiana Weekly newspaper.
