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Tax Reduction Alone Will Not Help Harrah's New Orleans Casino27 September 2000NEW ORLEANS, Louisiana -- (News Brief) – Sept 27, 2000 – As reported by The Associated Press: "Harrah's New Orleans Casino has no guarantee of success even if the Legislature cuts its gambling tax and allows it to have a hotel and unlimited restaurants, according to an investment bank's study. "In a report to its investment clients, San Francisco-based Banc of America Securities said that a tax reduction alone will not help the casino, which has said it will likely close next March without a reduction of its $100 million annual minimum tax. "The report said that even if the tax is cut by half, the casino still cannot cover its $40 million to $45 million annual debt service. "In order for the casino's financials to go from 'red to black' without additional amenities or other favorable opportunities, the gaming tax would need to be whittled down to practically nil by our calculation,' said Banc of America Securities analyst J. Cogan, who follows the casino. "Last week, the casino's owner, JCC Holding Co., said it could not continue operating after March without a "fair tax." The company also is seeking authority to have a hotel and unlimited restaurant service. ". . . The minimum tax was imposed by the Legislature in 1992 when Wall Street analysts believed that the New Orleans casino market would bring in $800 million to $1 billion a year. The current total, including three riverboat casinos in the New Orleans area, is about $450 million. ". . . A city-state committee has been appointed to study what should be done with the casino…" |