Coronavirus: Temporary shuttering of Louisiana's casino industry upsetting local economies

Allison Kadlubar
LSU Manship School News Service

LAKE CHARLES — Lake Charles attracts visitors to its restaurants, events and outdoor adventures, but its luxury casino resorts dominate the city's hospitality and tourism industry.

The novel coronavirus, or COVID-19, has shuttered these money-making machines for seven weeks, leaving the booming Lake Charles economically filled with uncertainties.

Tye Robinson, a bellhop at Golden Nugget Lake Charles, collected his last tips from Golden Nugget guests over a month ago.

"I would get a lot of tips, so I would use my cash on my bills and daily necessities," he said.

Golden Nugget Lake Charles Hotel & Casino employee Tye Robinson remembers the day he found out about the casino's closure.

Robinson was working at the casino when he learned of the closure due to COVID-19.

“I found out the day before we shut the operations down, and I found out from a news report,” he said. “It was news to me.”

Robinson and his co-workers lived in uncertainty for a week before the casino informed employees. Robinson received one month’s pay and immediately filed an unemployment claim.

"I'm thankful for unemployment for saving me," he said.

Although the closing of the casino industry is impacting his life, it also is causing serious economic problems for the rest of the community and the state.

Gaming operations in the Lake Charles area amassed more than $906 million in revenue in 2018, distributing more than $36 million throughout Calcasieu Parish, according to a KPLC-TV report. The hospitality and tourism industry ranks No. 2 behind the petrochemical industry as an economic driver in the area.

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"You know, our culture is something that people travel from around the world to come and see, so we get a lot of this,” said R.B. Smith, vice president of business and workforce development at the Southwest Louisiana Economic Development Alliance.

R.B. Smith, vice president at the Southwest Louisiana Economic Development Alliance, described the areas of the hospitality and tourism industry that are being hit hardest.

Riverboat, land-based, video gaming and racetrack casinos in Shreveport, East Baton Rouge Parish, New Orleans and other cities in Louisiana generated more than $3 billion in net revenue with more than $700 million directly benefiting state government, according to the 2019 Louisiana Gaming Control Board Report.

Gambling normally tops even the oil and gas industry in its contribution to state revenue, and both industries have been severely hurt by the virus, threatening local and state budgets.

In Lake Charles, gaming typically brings in more than a billion dollars a year from visitors from Houston alone. However, with the Louisiana-Texas border blocked, and the casinos closed, the businesses are taking a punch.

"Visit Lake Charles is currently predicting an economic loss in excess of $500 million from the tourism economy in 2020,” said Kyle Edmiston, chief executive of the local visitors’ bureau. “This is a highly fluid prediction as it is completely dependent on when tourism businesses are allowed to reopen and at what levels the crowds and attendance are mandated by executive order."

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The empty parking lots of hotels within the area show their losses with only an 18% occupancy rate. At this time last year, the rate was 73%.

"There is absolutely a ripple effect on all businesses in the travel and tourism sector with those properties remaining closed for approximately seven weeks,” said Edmiston. “It is still too early to predict permanent closures based on the information that is currently available."

The dips in these revenues will also hurt the development plans of the City of Lake Charles.

The lack of revenue will not affect essential city projects, such as repairing underground sewer works. However, the overall impact depends on when and how the economy opens up again.

"Long-term, I think we're going to be all right,” Smith said. “Short term again, I think everything's on hold until we see it, when we can open the economy back up.”

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As Lake Charles anxiously waits for the death of the virus and the resurrection of the economy, Robinson is eager to return to work.

"I plan on going back after all of this is over because it is a very good job, and I do enjoy working,” he said. “I just want this virus to end."