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Archive for Friday, February 6, 1998

HYPE AND HYNOSIS? HYPE AND HYPNOSIS?

February 6, 1998

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Gambling people make big promises, convince some of the miracles they can work, but seem to ignore the debacle in New Orleans.

Those inclined to regard gambling casinos as be-alls, end-alls to boost education funding and local economies would do well to see the $825 million (or more) white elephant sitting in the heart of the New Orleans business-entertainment district. Adjacent to the idle New Orleans Jazz project are unfinished tiered parking lots that were supposed to serve the thousands expected at the gaming site.

The controversial Louisiana casino, near the famed French Quarter, was scheduled to open in 1999. It has been in bankruptcy proceedings since 1995. A settlement of the case is awaiting approval by the state legislature due to meet in special session in late March.

Many New Orleans residents are incensed that the vacant casino facility, an ostentatious but only half-built neoclassical structure, was put up in place of a perfectly workable and historic building. The old building was razed for what some expected to be a money machine to benefit the region. And, of course, what is an "entertainment mecca" without parking. That, too, helped run up bills which now are clamoring to be paid. And like the fenced-off casino, the parking sector awaits rescue.

Just this week, Jay Sevigny, Midwest president for Station Casinos, which has a big Kansas City "riverboat" operation, resigned to rejoin Harrah's Entertainment as its top executive in New Orleans. We presume he is being sent there to revive the Jazz casino project, providing the state legislature lets him try.

Earlier, Sevigny had quit as general manager of Harrah's North Kansas City Casino and Hotel to run the Station Missouri operations in Kansas City and St. Charles. He had been with Harrah's for four years. While with Station, Sevigny directed heavy employee layoffs and other cost-cutting measures in what so far has proved to be an unsuccessful effort to overtake the Kansas City Harrah's venture. In that particular locale, at least, Harrah's is the leader among the casinos.

So now Sevigny is being sent to breathe life into the troubled Harrah's venture in New Orleans. Harrah's opened a temporary casino in New Orleans three years ago when the Jazz project was floundering and it failed for a number of reasons, including the fact it was in an area that tourists are routinely warned to avoid. That cash flow being shut off, Harrah's and the Louisiana partners in the gigantic Jazz project filed for bankruptcy.

Many gaming proponents say that the Jazz casino's proximity to the French Quarter and the city's thriving riverfront entertainment district will pay big dividends for the company and the community. All along there have been huge promises of economic benefits, including major contributions to the education system. But veterans in the field of schooling and economics have understandably grave doubts.

Once again we find a good example of promised benefits from gambling operations with less than impressive results. There have been numerous past failures, though probably not on anything resembling the scale of the New Orleans debacle. If Sevigny can move from Kansas City to New Orleans and lead the Harrah's Jazz venture out of the wilderness, he will accomplish one of the miracles of promotion, marketing and merchandising.

All the while, the Kansas City area "riverboat" operations continue with mixed reviews while other casinos open and efforts are expended to establish even more in this oversaturated area of Kansas and Missouri.

Anyone with delusions of grandeur about the merits of casino gambling and what it can do to or for an area need only drive by the New Orleans Jazz skeleton to see a wager that didn't pay off.

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