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October 25, 2014

New Orleans School System Finally Takes Advantage of Gambling Revenue


For reasons undisclosed, New Orleans school districts have allowed a huge financial opportunity to pass them by for the past several years. That opportunity entails over $10 million in school funding from revenue generated by Harrah's in New Orleans.

A fund of approximately $2 million per year has been paid by Harrah's to the city of New Orleans for at least four years now. That fund is earmarked for the improvement of the city's public schools. The amassed money is under the supervision of the City Council and cannot be released to the schools until they present a detailed plan as to how the money will be used.

Harrah's New Orleans casino, Louisiana

In late December, 2013, a plan was finally presented in which the Orleans Parish School District and the Recovery School District of New Orleans would use the cash toward various projects and repairs. Specifically, the Orleans Parish School District would use a quarter of a million dollars toward a new heating/cooling system at Warren Easton High and three quarters of a million toward the renovation of an auditorium at Eleanor McMain High. The Recovery School District, which is actually a conglomerate of several failing school districts across New Orleans and the state, would use $2.5 million toward needed building repairs and nearly $3 million toward its work with needy students.

The districts' requests were acknowledged and school officials were granted access to the Harrah's money. In order to keep receiving the money, both districts will have to biannually document their progress toward these goals.

City Councilwoman LaToya Cantrell remarked that it was "pretty much a shame" that ten million dollars sat unused for such a long time in a savings account. No explicit reason for the school systems' delay has been released to the public.

Casino Revenue and Schools

Across the United States, gambling continues to be seen as a way to earn revenue for hurting school systems. This argument is often used, in fact, by advocates who support the growth of the American gambling industry.

Gambling revenue is put to hard work in many states across America. Here are some examples:

New York

In November of 2013, New York citizens voted to allow the construction of seven new casinos throughout the state. The effort, spearheaded by Governor Andrew Cuomo, was touted as a multimillion dollar money source for ailing schools.


In Pennsylvania, a significant portion of slot machine revenue is applied toward the reduction of school property tax. Overall, 55 percent of Pennsylvania casino revenue is said to go back to Pennsylvania residents.


In Biloxi, Mississippi, 20 percent of revenue is applied toward the city school fund and 10 percent goes toward the county school fund. As a basis of comparison, 40 percent is applied toward the city's general fund.


In Maryland, nearly half of all slot machine revenue goes toward the state's Education Trust Fund. A spokesman for the Maryland Department of Education has said that his schools are largely funded by the state general fund and the aforementioned trust fund.


Springfield College logo

Massachusetts officials recently announced that they would be using future casino revenue to help fund early childhood education programs in Springfield. Mayor Domenic Sarno has said that education is one of the best ways to combat poverty and public safety issues in America, indicating that he hopes the boost to early childhood education in Springfield will help with this mission.


When Ohio decided to allow the construction of the state's first four commercial casinos back in 2009 (read this page), school funding was a major talking point for casino advocates. Today in Ohio, these four casinos are taxed at 33 percent. The Gross Casino Revenue County Student Fund receives a 34-percent slice of that pie. School officials have expressed gratitude for the money, but have also remarked that the amount of gambling revenue they receive is 'miniscule' compared to their overall needs.

Is the Money Doing Any Good?

While hurting American school districts certainly appreciate the funding that comes to them via gambling revenue, the question of whether or not the money makes a significant impact on education is still up for debate.

Schools in Detroit, Michigan have been receiving revenue from area casinos for over 10 years with little to show for it. For three years in a row now, Detroit students have received the lowest score of all on the Trial Urban District Assessment, or TUDA. Poverty is blamed as a factor in this ailing city, which recently filed for bankruptcy.

Detroit area casinos include the MGM Grand Detroit, the MotorCity Casino Hotel, and Greektown Casino.

Lottery Revenue and School Funding

The concept of funding schools through lottery revenue is older than the concept of funding schools through casino revenue. Critics have expressed doubts in the lottery's ability to adequately fund schools, too.

In California, for example, lottery revenue is not actually regarded as supplemental education funding. Before determining how much money schools will get from the state fund, California politicians take a look at how much money the lottery is contributing and deduct that from what they would have given from the state fund, according to some critics.

While it is true that gambling revenue funds American education, the numbers can be deceiving. Critics maintain that gambling revenue is not all it's cracked up to be, while proponents continue to push for casino development as a means of subsidizing schools.

Perhaps the critics' view would explain why New Orleans school officials were not chomping at the bit to use the $10.5 million from Harrah's. While the money is significant, it is just a drop in the bucket compared to the overall budgetary needs of students in that area.

Still, a $10 million educational funding supplement from a local casino is better than nothing. Now that this issue has come to the public's attention, perhaps New Orleans school officials will be faster on the draw in future casino revenue dealings.


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