Taking a hit

Taking a hit

L'Auberge has increased overall gaming revenues in the Baton Rouge market, but the city's two veteran riverboats are getting pinched.

Eight o'clock on a Saturday night. Two-thirds of the parking lot at Hollywood Casino is empty. Drive down River Road a bit to the Belle of Baton Rouge and a few more people are making their way to the entrance. Still plenty of parking, though.

At the sprawling new L'Auberge Casino, it's an entirely different story. This parking lot is two-thirds full, and the garage is packing vehicles all the way to the top. Meanwhile, a steady stream of headlights flows along the winding road toward the glowing entrance.

Such is the new reality of Baton Rouge's casino market.

In its eight months of operation, the new L'Auberge Hotel & Casino has attracted more than 1.2 million visitors, raking in $110.6 million. The new venue is bringing millions more in gaming revenues to the Baton Rouge market, which, in turn, means millions more in revenues for Baton Rouge and Louisiana.

But there's no denying this: Its success is partly at the expense of Baton Rouge's other two riverboats, which opened two decades ago—the Belle of Baton Rouge and Hollywood Casino.

Compared to the same eight-month period last year, the Belle's revenues are down 27% and attendance has fallen more than 6%. Hollywood is experiencing an even greater downturn: revenues are down 33% and attendance is down 28%.

In pure numbers, the Belle is raking in $11 million less than it did in the period before L'Auberge opened; Hollywood, $28.6 million less.

Wade Duty, executive director of the Louisiana Casino Association, doesn't expect that trend to change.

“Each boat took a significant hit in terms of their volume,” he says. “There's been a net increase for the market, but certainly a significant reduction for the two operating boats that were here previously. You definitely see redistribution. You're probably looking at the state of affairs as it will exist from this point forward.”

Even before L'Auberge broke ground, economic experts predicted one of the existing boats likely would sink under the crush of competition at some point. So far, however, there's been no sign of that happening.

Representatives from the Belle and Hollywood did not respond to requests for interviews. But Duty says both venues have taken significant steps to protect their markets.

“They've made realignments and tried to improve their efficiencies,” Duty says. “It's not something that they obviously wanted to go through, but they're both good operators with a lot of experience, and they will ride it as it currently stands.”

Overall nearly 1 million more people have walked through the doors of Baton Rouge casinos and spent $71 million more dollars over the prior fiscal year to date—a sign that L'Auberge is expanding the market. That's an increase of 42% in attendance and 39% in revenues. For the month of May alone, revenues climbed from $16.9 million in 2012 to just over $26 million in 2013—an increase of 54.3%.

That, in turn, has resulted in a 40% hike in taxes and fees paid to the state and the city-parish in just a single year—$53.8 million in the current fiscal year to date, compared to $38.6 million during the previous eight-month period.

“The thing you always want to be careful of when you admit a new venue to any market is the impact on existing operations,” Duty says. “When you're looking at this from a regulatory standpoint of what's best for the state, you want to make sure you receive a net overall increase for the market. I think that's been accomplished here.”

L'Auberge Vice President and General Manager Mickey Parenton says the casino has met expectations but will continue its push to attract guests from outside the Capital Region and out of state. Thus far, a quarter of the casino's guests have been from out of state, thanks to marketing efforts to major events in the past year like LSU football games, the Super Bowl and Bayou Country Superfest.

“All of the trends are great,” Parenton says. “Everything that you look at—our gaming, our restaurants, our hotel occupancy rate in the high 90s. We said we were going to be a destination for the region. We're pleasantly surprised with the business from the local market, which is our core business, but we are continuing to see growth out of the region every month.”

The new casino venue plans to step up its offerings in the coming months, including concerts featuring Smokey Robinson, Morris Day and The Time, a Michael Jackson tribute, and live entertainment every Friday night before LSU home games.

“We're just beginning,” he says. “It's only going to get better and better.”

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