Why the Gambling Situation in Louisiana Is So Complicated

Louisiana State Flag With a Casino Background

Louisiana just can’t seem to stay out of trouble when it comes to gambling.

You had your scandal with your original lottery that you stepped over some lines (state and law wise). And your politicians seem to be to keep getting caught taking bribes from gambling interests.

Louisiana and its politicians (and other government officials) just can’t seem to get it right when it comes to gambling.

I want to talk about it, it’s a complicated story.

The Louisiana Lottery Company

In 1868, Louisiana was the home of the largest corporation in America. The Louisiana State Lottery Company (LSLC) was formed by a handful of businessmen who saw an opportunity to make some big money.

Don’t worry, they did.

Big.

MONEY.

The Louisiana State Lottery Company sold lottery tickets through the mail across the United States. They only made about 7% of their revenue from Louisiana ticket sales.

They agreed to pay the state of Louisiana $40,000 a year to be able to operate out of New Orleans. With inflation, that’s only about $800,000 in today’s money. To put this measly sum in perspective, the City of New Orleans spends $1.5 million for Mardi Gras street clean up.

The company became so successful that it was nicknamed “The Octopus.” The company’s prosperity can be contributed to their discovery that politicians in Louisiana could be bribed and coerced via under the table payments.

Vintage Lousiana State Lottery Ticket

This was the first time Louisiana started its long love affair of mixing politics and gambling.

As you will see, this is a terrible concoction.

The Louisiana State Lottery Company was able to make itself the largest company in America at the time. They were able to achieve this because they had an in with the Louisiana legislature. We give you some of our money, and you pass bills in our favor.

Anyone who has taken a high school government class knows this is not OK. Politicians are supposed to represent their constituents, not companies that are based on their state.

You can see the problem.

The LSLC was so hated by Louisianans that they refused to buy tickets from the company. The government started to get wind of the company’s nefarious business practices. The federal government even threatened to shut them down for operating a monopoly.

The final nail in the coffin for the Louisiana Lottery Company was federal-state charges of corruption and bribery. The federal government went on to outlaw lottery ticket sales across state lines in 1890.

This federal law forced the LSLC out of the states. They ran their operations briefly out of Honduras for a brief period. They finally decided to call it quits in 1907.

The LSLC left such a bad taste in Louisiana’s mouth that the state didn’t reintroduce legal lottery tickets back into the state until 1991. Not a good start, Louisiana.

Legal Casino Gambling and Governor Edwin Edwards

In 1991 gambling was legalized in Louisiana casinos, three years after the Indian Gaming Regulatory Act (IGRA) of 1988. The IGRA legalized casinos and gaming on native lands. This ushered in the push in the Louisiana legislature to address legal casinos in the state.

The legislature eventually legalized casino gambling. This move was led by the future four-term governor of the state, Edwin Edwards.

Edwin Edwards was a caricature of a Southern politician. He had a big personality, a voracious love of the fairer sex, and an even more immense love of casino gambling. He was a known high roller of the Vegas Strip. His passion for casinos was reflected in his opinions in politics.

In 1991, Edwin Edwards (D) would win the governorship by a slim margin, beating David Duke, known white supremacist and KKK member. The unofficial campaign slogan was “Vote for Lizard, Not the Wizard.”

Louisianan voters were aware of Edwards’s past corruption and extramarital affairs. The lesser of two evils seemed to be their choice.

Amelia Belle Riverboat Casino

When Louisiana legalized casinos, after a 179-year hiatus, there were 15 riverboat casino licenses up for grabs. This limited number was the perfect breeding ground for corruptive politicians. This is where Edwin Edwards comes into play.

In 2001, he was indicted on 17 counts of racketeering, mail and wire fraud, conspiracy, and money-laundering.

Here’s a Cliffs Notes version of what happened:

  • Edwards received campaign contributions and bribes form casino developers and mini casino owners. Mini casinos are “truck stop” casinos that have video poker and slot machines in them.
  • Other Louisiana State legislative branch members also received bribes to act in the best interests of the casino industry.
  • Edwards appointed a known mafia tie to the Louisiana governmental arm that oversaw the 15-state issued casino riverboat licenses. This is an issue. The American Mafia has long ties with casino gambling and running abusive bookie rings.
  • Edwards is caught on FBI surveillance video accepting a bribe of $20,000 in exchange for a “good word” on a riverboat license.
  • This bribe blows the top off the underlying corruption within the state’s gambling industry.

As you can see, this is not good. Edwards ends up being sentenced to 10 years in a Louisiana federal prison. He served 8 years with the rest of the sentence as in-home probation. He will go down as history as the most loved corrupt Louisiana politician.

Louisiana has a long history of corruption in their politics.

And it doesn’t end with Edwin Edwards. It’s still happening today.

2019 Louisiana Governor’s Race and Vegas

You can probably guess where this is going.

It’s not going to go well.

According to a March 2020 NPR report, casinos and the gambling industry donated almost $400,000 in campaign money to the Democratic Governors Association.

What?

I know, but they found a legal workaround.

Louisiana law states that the gambling industry can’t donate money directly to an election campaign. What the industry did find is that they can donate to the Republican or Democratic Governor’s Associations.

While this is not illegal, it’s undoubtedly a little bit more than shady.

Guess who won the Governor’s race for 2019?

John Bel Edwards.

No relation to our boy Edwin Edwards.

Maybe it’s just a common name in the state for scrupulous governors?

Here’s a closer look at the contributions to the DGA form Vegas entities in the fall of 2019 according to NPR:

  • Caesars donates $50,000.00 on 9.27.2019
  • Caesars donates another $50,000.00 on 10.11.19
  • IGT Global Solutions (a slot machine manufacturer) donates $50,000.00 on 10.17.19
  • Internation Gaming Technology (another arm of IGT) donates $50,000.00 between 10,25.19 and 11.1.2019
  • Konami Gaming Inc. (another slot machine and video gaming manufacturer) donates $10,000.00 on 10.8.2019
  • Las Vegas Sands Corporation donates$50,000.00 on 10.4.2019
  • MGM Mirage donates $100,000.00 on 10.1.2019
  • Wynn Resorts donates $25,000.00 on 10.3.2019
  • It should be noted that the same Vegas interests donated over $200,000.00 to the Republican Governor’s Association during the same time frame

This is entirely legal according to the Louisiana campaign laws. The problem is that it gives entitlement to the casino industry.

We all know when a corporation or entire industry makes a large campaign donation (no matter the avenue of contribution), the presumptive elected official is now in bed with that industry.

This is not good. These companies funded the campaign of both nominees in this race. Their dollars got Governor Edwards elected. There is no way around it.

It will be interesting to see how this plays out in the coming term for John Bel Edwards. He has already granted Harrah’s property a 30-year extension on their casino license in the state.

Harrah’s is owned by Caesars. Caesars donated almost a ¼ of the casino industry donation to the DGA.

Golden Nugget Lake Charles in Louisiana

What favors will be given to the other nine casino industry contributors?

Do you see a trend here?

You’re probably saying, “Beth, this is just the nasty side of American politics. It’s just how politics work in this country”.

That is true, but it still doesn’t make it OK.

What about the Las Vegas casino competitors, the Native Tribe politicians?

Are they pumping money into the campaigns and communities of the Native Tribes? No.

The problem, in my not so humble opinion, here is that the companies are circumventing the good of politicians for their own interests. Elected officials are in office to act in the interest of the people.

This is muddied when I see campaigns funded through financial streams such as the casino industry. The rant is over.

Conclusion

The State of Louisiana has a long, torrid, scandalous, and ingrained relationship with gambling in their history. It is becoming more above board, but they just can’t quit each other.

Whether its shady private lottery companies or political campaigns funded by the big Vegas players, Louisiana can’t quite figure out how to be in a healthy relationship with legalized gambling.

Permanent relationship status — It’s complicated.

As they say, “Laissez le Bon temps rouler” in Louisiana. Let the good times roll, but maybe not in politics. It just doesn’t work out.