Is Louisiana Economy Betting Too Much On Gambling With Texan Candidate?

Louisiana has pinned high hopes on its casinos to play a major role in the state’s economic recovery in the aftermath of hurricanes Katrina and Rita. Yet this stream of revenue could well run dry if maverick Texan gubernatorial candidate Kinky Friedman has his way.

Kinky has pledged that, if elected Governor on November 7, one of his first moves will be to legalize casino gambling in the Lone Star State.

Should that happen, the big losers will be Louisiana’s casinos, in particular those in Lake Charles and Shreveport who derive as much as 85% of their business from Texan visitors. And the state of Louisiana derives a substantial chunk of its revenue ($436.9 million in 2004) from the casino gambling industry.

Meanwhile, the very survival of New Orleans hinges on the state’s ability to provide a range of support to help the city rebuild its decimated economy.

There is no doubt that Louisiana’s casinos currently provide a much-needed revenue lifeline. Yet they will continue to do so only as long as they are viable, and that seems to be almost entirely dependent upon the legal status of casino gambling in Texas.

A major illegal competitor has also emerged in the form of online gambling, and Louisiana is using the full force of the law to prosecute Peter Dicks of UK-based Sportingbet for running an online gambling operation. Mr Dicks was arrested on arrival at New York’s Kennedy airport on September 7, on a warrant issued by Louisiana state police; he now faces a maximum sentence of five years jail and a $20,000 fine.

At the end of the day, Louisiana can do only so much to protect its casinos from outside competition, and Kinky is the latest reminder that the threat of legalization in Texas is ever-looming, whether or not he hits the jackpot on November 7.

This may only be a wake up call, but we should nevertheless be considering the implications of depending too much on a source of revenue that could be all but wiped out by external forces beyond the state’s control.

As we rebuild and look towards the future, we would do well to take this historic opportunity to develop a more robust, innovative local economic growth strategy that will create a sustainable base on which New Orleans and Louisiana can thrive in the modern global economy.