[Congressional Record Volume 141, Number 193 (Wednesday, December 6, 1995)]
[Senate]
[Page S18100]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BREAUX:
  S. 1450. A bill to provide that certain gaming contracts shall remain 
in effect, notwithstanding filing for bankruptcy, and for other 
purposes; to the Committee on the Judiciary.


                  the gaming contracts compliance act

 Mr. BREAUX. Mr. President, today I am introducing legislation 
that is intended to protect State and local governments from the 
financial crises caused when a casino declares bankruptcy and shuts 
down. I believe that gaming corporations should not be allowed to use 
Federal bankruptcy laws as leverage to gain more concessions from the 
city and State in which they are operating.
  On November 22, 1995, Harrah's casino in New Orleans declared 
bankruptcy and shut its doors--laying off 2,500 workers and leaving 
city and State officials facing multimillion-dollar budget shortfalls. 
As a result, the city may have to lay off as many as 1,000 city workers 
and substantially curtail city services. It is also estimated that the 
Louisiana Legislature faces a deficit of between $88.5 and $97.5 
million this fiscal year if Harrah's remains closed.
  The Gaming Contracts Compliance Act would protect the city of New 
Orleans and the State of Louisiana, and other cities and State 
governments in the future, by prohibiting gambling establishments from 
getting out of their original contracts with city, county (parish), and 
State governments by declaring bankruptcy. These corporations would be 
obligated to fulfill the original contracts even as they undergo the 
reorganization afforded them by bankruptcy protection. Casinos in 
bankruptcy would be allowed to renegotiate their contracts only if 
government officials agree.
  This legislation would prevent casinos like Harrah's from closing 
down to force a better deal from State and local governments--all at 
the expense of local taxpayers and casino workers. State and local 
officials cannot be left holding an open bag of broken promises given 
by international gaming operations simply because gambling revenue 
estimates are off the mark. The welfare of our cities and its citizens 
must come first.
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