Lawmakers in Louisiana have tabled a measure that would have expanded online casinos in the state. They said more study is needed before a final decision can be made. One bill on sports betting was advanced, however. A Senate committee heard testimony that laid out the pros and cons of sports betting. But, apparently, the issue remains cloudy for some legislators.
State Sen. Danny Martiny introduced the iGaming bill. The senator also sponsored the bill on sports betting. He contends that both are geared toward shoring up Louisiana’s ailing financial condition, which has struggled in the past decade following devastating hurricanes and has never quite recovered. Martiny said, “I’m just telling you we’re broke, and nobody else has any ideas of how we can fix it.”
The Effects of Hurricanes Katrina and Rita
Before the hurricanes in 2004, Louisiana’s tourism industry was booming. There were 165,000 workers employed in the state In the aftermath of the storms, resources had to be redirected from tourism to aid residents and bring in contract and government workers to help with the clean-up effort. Many resorts and casinos were closed because of storm damage and some hotels and restaurants operated on a limited schedule and were unable to find workers.
Hurricanes Katrina and Rita caused a 34 percent decline in tourism revenue, according to the Louisiana Tourism Forecast. Just a few years later, in 2008, the state was once again hit by hurricanes Gustav and Ike. While the damage from these hurricanes was not as extensive, Louisiana was already on its knees, financially speaking, so the negative effect was more dramatic. Then, came the BP Horizon oil spill in the Gulf of Mexico. Therefore, there is cause for Martiny to be concerned about his state’s economy.
iGaming Is Still A New Concept in The Bayou State
iGaming is still in its infancy in Louisiana. Legislators admit they have homework to do before they fully understand the ramifications of passing the bill. To become law, the online gambling and sports-betting bills both require a referendum among voters.
Opposition to S-322 is coming from Louisiana’s Video Gaming Association, which operates video poker machine setups in gas stations, bars/restaurants, and travel centers around the state. Video gaming is heavily taxed and generates about $320 million annually in state revenue. Alton Ashy, association chairman, said, “This bill, Internet gaming, we think will devastate the industry because people are just going to stay home.”
Other committee members voiced concerns about a mass exodus of jobs leaving the state. Video gaming provides jobs. Online gambling, they fear, would take them away.
Those advocating passage of the bills point out that the game terminals that are in gas stations and travel centers are quite different than online casinos and will be geared toward different audiences. Even so, lawmakers want to take their time and examine the issue from all angles, probably because such a large portion of the state’s revenue generation is at stake. Obviously, the Louisiana legislature is not willing to gamble with state finances.
Thomas Winter oversees Golden Nugget online gaming. Winter provided data in his testimony that found the job cannibalization argument was unfounded. He offered examples of case studies of the New Jersey Golden Nugget as proof and insisted the two products, online gaming, and land-based casinos, attract completely different users from two different demographics. Online gamblers have an average age of 42, while casino patrons tend to be about 58 years. Winter pointed to New Jersey’s success last year when the state earned revenue from online gaming that was close to $70 million.
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