They’ve got brass balls at Harrah’s New Orleans. Not only do they want an early extension of their terra forma monopoly, which expires in 2024, they want a big-ass tax rebate
to go with it. At stake is a 2001 law whereby hotels like Harrah’s are required to pay 9% to the state in sales and occupancy taxes. That adds up: $40 million over 18 years. Now Harrah’s wants the money back. It has written language into HB 544 that would exempt it from those taxes, a sweet deal. However, neither the convention center nor the Superdome Commission is amused. Harrah’s—which is planning a 340-room ancillary hotel—needs to resolve the matter first in a Baton Rouge court which will hear its contention that the taxes are unconstitutional.
Gov. John Bel Edwards (D) balks at what looks like special treatment for Harrah’s. “I don’t know how you would do that with respect to Harrah’s and not all of the rest,” he told reporters. Harrah’s has a lot practice: It has been litigating this since 2010. “Harrah’s New Orleans doesn’t comment on pending litigation, although we would note that no other state imposes a tax on comped rooms, nor do other casinos or hotels in Louisiana pay such a tax,” the company said. We’ll see how much ice that cuts in court, since HB 544’s rebate is contingent upon a Harrah’s win.
* With resort fees running rampant, Booking.com wants a piece of the action. It is pondering charging hotels a commission on resort fees and for-pay wifi. This could be a problem for resorts that use resort fees to claw back what they’re losing to OTAs. As Skift.com reports, “In Las Vegas, for
example, resort fees are sometimes higher than the room charge.” Booking.com’s change of policy is supposed to go into effect next month, presuming that hotels cooperate. Our suspicion? The hospitality industry will try to make the money back—by raising resort fees still higher. Call it a historically informed guess. Then there are those like VitalVegas author Scott Roeben who see an upside in this move, thinking it could be the beginning of the end of resort fees. Given how passionately CEOs like Jim Murren cling to their resort-fee revenue I’m guardedly skeptical but let’s hope Roeven is right. As for resort-fee scofflaws, they include Donald Trump, whose English Trump Turnberry tried socking customers with a $25 impost until informed it was in violation of U.K. rules.
* EB-5 investors in the Lucky Dragon Casino find themselves doubly out in the cold, being bereft of their $550,000 investments and the green cards they were promised. Ditto a Canadian high roller who paid $400,000 for one
night’s exclusive use of the casino. Forty investors are suing on the grounds that they are “entitled” to their money. They probably have as much as getting blood from a stone but can’t be faulted for trying. “Losing your money is awful; on the other hand, if you don’t get a green card, that’s double punishment,” said their attorney. Between construction costs and suspicious-sounding “administrative fees,” the EB-5 crowd is out $98.5 million.
The lawsuit seemed to come as news to CBRE broker Michael Parks, who told Sheldon Adelson‘s Las Vegas Review-Journal, “We were always under the impression that the bankruptcy wiped everyone out.” (Snow Covered Capital sold the property through CBRE.) They’ll see about that in court.
* Nevada continues to outpace the national in job growth, adding 49,600 last month. Reno was fastest, at 5.5%, while Las Vegas employment grew 2.4%. The national average is just under 2%. Unemployment rates only shrank incrementally, suggesting an influx of new workers. Still, every little bit helps.
* Congratulations to attorney Steve Cohen, named by Gov. Steve Sisolak (D) to the Nevada Gaming Commission. Sisolak needs to be careful: Cohen is the second straight lawyer he’s named to the NGC, running the risk of repeating Gov. Jim Gibbons‘ mistake of packing the Nevada Gaming Control Board with lawyers at a time when the casino industry’s problems cried out for a forensic accountant instead.
* Las Vegas buffets have managed to maintain civility around the crab legs. Other cities have not been so lucky. The solution? Rationing. Incidentally, crab legs are high in protein and an excellent food to eat while on a diet … providing that you skip the drawn butter and the cocktail sauce.
