Casino news source: The Daily Reveille - http://www.lsureveille.com/
Deadline nears for addition of third BR casino
Pinnacle has bought land for boat
by David Brennan
Issue date: 10/11/06 Section: News
Gaming officials expect gambling in Baton Rouge to bring in outside money from other parishes and states, but studies say it is sucking its residents dry.
Recently, Pinnacle Entertainment bought a 35-acre tract for $1.1 million in Baton Rouge that could provide a site for the city's third riverboat casino on River Road near Bluebonnet Boulevard.
The deal comes after Louisiana casino boat companies said they need more boat casinos in the state to compete with Mississippi's new lower taxes and recent decisions to loosen gambling restrictions.
Pinnacle recently purchased Harrah's Entertainment's two riverboat licenses in Lake Charles for $70 million and has one license available to move to another city. One of those licenses is being used to build a new riverboat casino and hotel resort in Lake Charles near Pinnacle's existing L'Auberge du Lac Hotel & Casino.
Since buying the two licenses, Pinnacle has 75 days to submit a request to the Louisiana Gaming Commission if it wants to change the location of its license in Lake Charles to Baton Rouge. If the request would be approved by the board, residents of East Baton Rouge Parish would have the option of approving the third casino for the March 31 elections. The Gaming Commission Board will meet Oct. 18 at the state Capitol where the issue will likely be brought up.
The petition deadline is Monday, April 30.
While some Baton Rouge residents might be anxiously awaiting a third casino in the port city, Louisiana geography professor Craig Colton said he thinks the casinos are doing more harm than good.
Colton said casinos were originally designed to bring outside money into the state from places such as Texas, the Gulf Coast and as far as Atlanta.
The formula has worked well in Lake Charles and Shreveport where gaming has become a huge economic drive for the community and state. Lake Charles continues to draw residents from southeast Texas and Houston, while Shreveport draws heavily from Dallas.
But in Baton Rouge and New Orleans, the formula does not appear to be working.
"The biggest difference is the geography of the situation," Colton said. "What works for them doesn't work for us. People gambling will stop at the first casino they see. People coming from the east will stop in Biloxi, and people coming from the west will stop in Lake Charles."
Mississippi's casino industry features entertainment like concerts, which are a heavy draw for the gambling tourist. Baton Rouge and New Orleans do not have that industry, Colton said. In fact, Baton Rouge is the smallest gambling market in the state.
He said the people who attend conferences and conventions in Baton Rouge and New Orleans are not the type of people who gamble.
Last year, Baton Rouge hosted the American Bowling Congress Championship Tournament, which drew out-of-state crowds to downtown where they stayed in hotels and visited casinos. The city had been trying for years to host the tournament because they knew that sector of people would gamble, Colton said.
The problem with casinos in Baton Rouge and New Orleans, according to Colton, is that if casino revenues are not coming from out of state, then it's local residents' money supporting the casinos.
"It strikes me that two is not enough," Colton said. "Do we really need a third? The two down there are pretty good at cleaning people out. Money is being spent at casinos instead [of] on groceries. Given the seriousness of a third casino, it would have been a drain on the population to maintain households."
In Baton Rouge, 93 percent of the people who visit the casinos come from this area, another 4 percent from outside the metro area and about 3 percent from out of state, according to Secretary of State Charles Foti's 2004 figures.
"I see middle to lower-class people in a ratio of 99 to 1 when I go to casinos," Baton Rouge resident Johnson Clawson said. "The only time I have seen people from out of town has been for big events. Out-of-state people are the wealthy ones that come. Then they come to the casino because they think it is the thing to do and see people who just got their paychecks gambling it away."
The two casinos in Baton Rouge are currently owned by out-of-state corporations that also own three casinos in New Orleans.
Currently Louisiana is tightly controlled and limits casino gambling to one land-based facility. The state allows 15 riverboats and only in those cities where the public has voted to allow it. Gov. Kathleen Blanco opposes the concessions and said Louisiana gambling boats can compete with Mississippi's expanding industry in a interview last week with The Advocate.
Both Casino Rouge, Belle of Baton Rouge and Pinnacle declined to comment.
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