Name of the Game Is Gaming
Louisiana has a long history of legal - and illegal - gambling enterprises
NEW ORLEANS — GAMBLING in Louisiana is neither unprecedented nor a cure-all, according to those who study gaming. In fact, the decision ushering in the construction of the Grand Palais casino at the foot of Canal Street is only the most recent chapter in more than a century of legal and illegal gambling in this state.
As long ago as the 1870s, the Louisiana Lottery Company held a monopoly on numbers betting within the state and hired as its principal spokesman famed Civil War hero Gen. P. T. Beauregard. Good-government reformers, though, upset over the lottery syndicate's penchant for bribing state legislators, finally won the statehouse in 1892. At the same time, the federal government announced that it would no longer allow the syndicate to use the United States mails - a devastating blow, because most of the lotter y tickets were sold out of state. Within two years, lottery officials closed down their Louisiana operations and transferred the game to Honduras.
Historians have documented that small gambling houses - although officially illegal - remained in operation throughout Louisiana in the decades that followed. But it wasn't until the famous Louisiana governor "Kingfish" Huey Long allowed crime boss Frank Costello to transfer his slot machines and casino operations to southern Louisiana in 1934 that gambling became widespread again. Within just a year, mob forces installed more than 1,000 "one-armed bandits" in New Orleans, opened numerous casinos in the neighboring parishes of Jefferson and St. Bernard, and took control of an extensive statewide bookie system.
Nearly every biography of Mr. Long and his brother, Earl - who served three times as governor - mentions their gambling connections. In addition, Federal Bureau of Investigation files obtained through the Freedom of Information Act in recent years show that the Longs agreed to let syndicate gambling operate without interference in return for regular mob payoffs reaching millions of dollars. In 1958, FBI chief J. Edgar Hoover wrote in an internal communication: "Gambling and vice rampant in Louisiana...."
Beginning in 1946, however, a reformist city government in New Orleans pushed most forms of gambling out of the city. Nonetheless, at the same time, perhaps the most luxurious casino of them all, the Beverly Country Club, opened its doors across the Mississippi River; it boasted of lavish gaming tables and entertainment provided by such stars as Jimmy Durante, Zsa Zsa Gabor, and Sophie Tucker - all at a time when gambling was still officially prohibited in Louisiana.
Casinos and slot machines remained popular in the state until the 1970s, although numerous federal and state officials began to step up their anti-vice efforts in that same decade. But in 1990, Louisiana set up its first statewide lottery since the Louisiana lottery experience of the 1800s, and the following year the legislature approved gambling for riverboats along the Mississippi River.
The most controversial gambling move, however, has come with state and city approval of a single land-based casino in New Orleans, a casino that gaming supporters predict will create up to 20,000 jobs and bring in at least $500 million in new and needed investment to the city.
The Grand Palais casino, as proposed by Hawaiian developer Christopher Hemmeter, will include 200,000 square feet of casino space in a $280 million facsimile of Paris's Grand Palais.
Under the terms of Mr. Hemmeter's contract with the city, the Grand Palais will pay $30 million in the next several months for signing a 30-year lease, in addition to another $8.7 million when construction begins, $2 million for street and traffic-signal work, and an annual $2 million to the Orleans Parish School Board for school-building repairs.
Although casino officials have declined to commit themselves to the 20,000 job figure, they have promised that 80 percent of all casino jobs will go to residents of New Orleans - 45 to 55 percent to minorities and 25 to 35 percent to women.
Gov. Edwin Edwards, meanwhile, has said that casino jobs will pay an average of $20,000 per year, while the city stands to make $75 million annually from the collection of sales, liquor, cigarette, and hotel and motel taxes.
"When you get right down to it, no one really know what's going to happen," says Vincent Maruggi, assistant director of the University of New Orleans division of business and economic research. "There's no guarantee that they are going to hire all of the people they say they will or that the casino will attract as many people as everyone hopes it will. We don't even know, if the casino turns out to be successful, if it will offset all of the other losses New Orleans has experienced in the past couple of years. This is new terrain for all of us, and nothing is certain."
Nothing except Mr. Edwards's belief that the casino will prove to be the shining glory of his already legendary career as Louisiana's governor.
"I really think he sees it as one of his greatest accomplishments," says John Maginnis, the editor of the Louisiana Political Review and author of two books on Edwards. "He thinks that ultimately it will turn out to be a great boon to development and prosperity, and that even his most serious detractors will eventually have to admit he was right."