Sunday, September 17, 2006

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. A budget black
hole of that magnitude could not hit Louisiana at a worse time, as the state
already faces a shortfall of almost $600 million in the 2006-2007 fiscal
year. 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.