New Orleans Decides to Take Casino Route to Get in the Black

CONCLUDING two years of political and legal maneuvering, New Orleans has officially decided to take a gamble on gambling as a route out of its economic doldrums.

``I believe this represents a significant step in the right direction,'' New Orleans Mayor Marc Morial announced just minutes after he reached an agreement with private investors that will result in the building of what is being described as the world's largest casino.

``Progress, even a small measure of progress, never comes without a fight,'' Mayor Morial said. The fight in New Orleans over the casino lasted longer, and was at times more bitter, than the Union Army's takeover of the city during the Civil War. Citizens' groups, preservationists, and various state and city lawmakers have challenged the 1992 legislation approving the casino.

But the major obstacle came last week when Morial, claiming the casino would require more city services, threatened to withdraw from an earlier arrangement made with casino and state officials unless New Orleans got more money. He demanded an additional $32 million and settled for an extra $22 million.

Some concerns remain

``Given what he had to work with, it turned out better than most people expected,'' says Jim Brandt, director of the Bureau of Governmental Research, a private agency that studies city government. ``We have a lot more money now than we did just five days ago.''

But Mr. Brandt and others also worry that the stakes may be too big. ``You really don't want to be put in a situation where you're looking at gambling revenue as a reliable source of revenue,'' he says, ``because it isn't.''

State Rep. Mitch Landrieu (D) of New Orleans, who says he is not opposed to gambling as much as he is the way the 1992 casino bill was written, agrees. ``Money from casino gambling may be on the increase for 10 years or so, he says, but inevitably it decreases, and if we end up relying on this as the one thing that's going to solve all of our problems, then we're in for a disappointment.''

But for many New Orleans residents the potential of prosperity has made the casino seem like a dream come true. For more than a decade, since the collapse of Louisiana's oil and gas industry in the early 1980s, New Orleans has lost thousands of jobs and people, and at the same time millions of dollars in petroleum revenues dried up. The median family income today stands at just under $23,000, compared to more than $35,000 nationally.

When Louisiana Gov. Edwin Edwards, who regularly visits the Las Vegas, Nev., casinos - proposed gambling as a means of economic recovery, he spoke of a casino with 400,000 square feet that would create about 20,000 new jobs and at least $700 million annually in new revenue for both the state and city.

An invasion of gambling

But since 1992, gambling has invaded the Deep South. Video-poker machines operate throughout Louisiana and riverboat casinos are docked along Mississippi's Gulf coast and the Mississippi River. Florida and Texas are considering bills legalizing gaming.

``We're eventually going to reach the saturation point with all of this,'' says Ralph Brennan, whose family owns four well-known restaurants in New Orleans. ``It just stands to reason that there are only so many gamblers out there.''

The New Orleans casino, officially known as the Grand Palais, will be run for the state by Harrah's Jazz Company, a Las Vegas group set up for that purpose. Expected to cost about $200 million to build, the New Orleans casino is scheduled to open in 1995.

Casino supporters point to statistics compiled by the University of Nevada at Las Vegas showing that casino earnings in the United States jumped from $4.2 billion in 1982, when only Nevada and Atlantic City, N.J., had gaming, to $10.1 billion in 1992, after the Mississippi River boats and various Native American reservations across the country began offering gambling, too.

``The theory is that there's enough interest out there to support all the different types of gaming,'' Brandt says. ``For a city like New Orleans, where even projected gambling revenues are proving to be crucial, we'd better hope that's true.''