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Mayor moves to heal New Orleans' lifeblood industry

Nagin hopes more casinos will quickly bring back tourists

Mayor Ray Nagin announced his casino expansion plan on Friday.


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New Orleans (Louisiana)
Casinos and Gambling

NEW ORLEANS, Louisiana (CNN) -- Mayor Ray Nagin called Friday for a major expansion of casino gambling in hurricane-hit New Orleans in a desperate attempt to quickly heal its battered lifeblood industry -- tourism.

"We will probably limp along for the next three to five years unless we do something bold," said Nagin at a news conference. "And to me, this is a bold statement."

New Orleans' economy largely depends on tourism revenue, and the city would face continued trouble without it -- although the city's French Quarter survived much of Hurricane Katrina's destruction. (Watch the mayor roll the dice on Vegas-style gambling -- 1:13)

"Now is the time for us to think out of the box," Nagin said while expressing some hesitancy about the method of his plan.

"I'd love to have another solution for the citizens. I'm not a big gaming person," he said.

Visitors spent $4.9 billion in 2004, according to the city's convention and visitors bureau, which also rates the tourism industry as New Orleans' second-largest employer.

Plan centers on hotels

Under the mayor's proposal, hotels with at least 500 rooms located in a U-shaped zone in the city's downtown area could be converted into full-fledged casinos. Nagin said six or seven hotels would qualify under the proposal, if their owners chose to participate.

Hotels on Canal Street -- the city's main thoroughfare at the edge of the French Quarter -- would be allowed to convert into casinos. However, those inside the French Quarter would not.

Currently, state law allows just one land-based casino in New Orleans, which is operated by Harrah's Entertainment Inc. Casino boats are allowed to operate in the Mississippi River.

Nagin said he didn't think gambling expansion would change the unique character of the city, which holds such well-known events as Mardi Gras and the New Orleans Jazz Festival.

"I don't ever see a scenario where New Orleans becomes Las Vegas. New Orleans is way too unique," Nagin said. "Las Vegas has casinos. New Orleans has so much more. ... To me, this is just enhancing what we have and creating some excitement."

State officials 'open' to idea

Under Nagin's plan, the state and city would evenly split tax revenue generated by the new casinos. A financial settlement would have to be reached with Harrah's to give up its city monopoly on land-based gambling, he said.

"They're not going to do that for free," he said.

Nagin said he had discussed his proposal with Louisiana Gov. Kathleen Blanco and her aides. He said they were "a little open to it."

"I'm not saying they have endorsed it whole-heartedly, but they are open to the discussion," he said.

Nagin said his plan would be beneficial for New Orleans and the rest of the state because the city accounts for about a third of Louisiana's economy, anything that accelerates the return of tourism would benefit the whole state.

In addition, Orleans Parish accounts for 44 percent of all state income from tourism, according to the New Orleans Metropolitan Convention and Visitors Bureau.

Before Nagin's plan could be implemented, it would have to be approved by city voters and the Louisiana Legislature.

He said the "best scenario" would be for the legislature to approve the plan and put it before voters during a city election scheduled for February.

Neighboring Mississippi -- which also was hit hard by Katrina on August 29 -- depends largely on the gaming industry. All 13 of Mississippi's floating casinos were destroyed in the storm. The closed or destroyed casinos cost the state $500,000 per day in lost tax revenue.

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