Faced with a fiscal crisis, New Orleans is considering selling the rights to future payments from the city’s Caesars-owned casino. Officials believe the plan could raise more than $100 million.
An ordinance allowing for the sale was introduced on April 23. Then, all seven city council members endorsed it.
Under the proposal, the New Orleans Building Corp. would sell future payments worth $148.8 million. The money would help immediatley help bolster city finances.
The city owns the corporation, which leases the property to Caesars. The deal would cover nine years and two months of rent. The city’s share of casino payments would drop from $23.6 million to $7.3 million.
Caesars New Orleans, previously called Harrah’s New Orleans, has been a staple of the World Series of Poker Circuit for most of the tour’s history. It starts another WSOP Circuit series on May 14.
The proposal notes that the city has a “pressing need for additional financial resources” but that the funds are “not presently needed for public purposes.”
Concerns Over Plan
If the city goes through with the sale, funds could be used to bolster the city’s emergency fund, which dropped from $344 million in 2022 to $35 million today, according to The Center Square.
Some, however, have concerns with the plan. The Bureau of Governmental Research said the ordinance doesn’t spell out exactly how the funds must be used. The nonpartisan, nonprofit public policy research organization said more specifics on what the city could do with the money were needed in the ordinance itself.
“The proposed ordinance authorizing the deal places no restrictions on how the city can use the money,” the group said. “The ordinance also lacks a requirement for the city to report regularly on its emergency reserves and show how the city is using the deal proceeds.”
City administrators are expected to amend the ordinance earmarking revenue from payment sales for the reserve fund. The bureau also urged regular reporting on the status of the emergency fund. Overall, the bureau saw the plan as a possible way to ease concerns over the city’s finances.
“The transaction offers a creative solution to bolster emergency reserves without increasing debt or taxes,” the group said. “But it also highlights the urgent need for transparency and safeguards to ensure responsible use of these funds.”
In other casino industry news, Nevada saw gaming revenue surge in March. Revenue was also up for the month in the country’s major online gaming states.
