The Louisiana Gaming Control Board approved a 75-employee reduction Thursday at Baton Rouge’s Hollywood Casino.
Hollywood’s general manager, Jim Rigot, cited loss of customers and revenue since the entry of L’Auberge — the area’s third casino — into the marketplace in late 2012.
“They cornered the market. We got the market share right,” Rigot said. “We thought the market would grow a lot more than it has,” mentioning a projection of $500 million in gambling with three casinos. “Clearly there’s more gaming supply than market demand.”
The board action means Hollywood Casino’s workforce will drop from 525 to 450. Rigot said the job reduction will occur through attrition.
Hollywood officials knew L’Auberge “was going to be formidable competition” with 51 percent of the market compared with 28 percent for Hollywood and 21 percent for the Belle, Rigot said.
The market grew by $96 million during the first year of L’Auberge’s operation to $291 million, with L’Auberge responsible for $149 million of the activity, Rigot said.
Rigot said Hollywood had an average decline of gross gambling revenue of $3 million “each and every month” during the first year of L’Auberge’s operation.
The Belle of Baton Rouge previously received board approval to reduce its number of employees from 600 to 450 based on loss of business.
A condition of the riverboat casinos’ license to operate is a guarantee to hire a specific number of employees. Any change in employee-guaranteed workforce requires Gaming Control Board approval.
Board Chairman Ronnie Jones said the riverboat casinos were sold to the people of Louisiana as job creators, making employment reduction requests “tough decisions.”
“We know what is going on nationally as far as (economic) trends,” Jones said. “We want to help you make it work.”
Board members questioned Rigot about how the reductions would be achieved and what Hollywood officials were doing to bring more business in.
“Is this attrition just for valet or people on the floor or is it top to bottom?” asked Denise Noonan, a board member.
“We are looking at all departments,” Rigot said. He said the casino has consolidated some top-level positions, requiring employees to take on more job responsibility.
Noonan said the board would have liked to have seen the employee reduction plan as it considered the license change.
Jones asked Rigot to provide him with specific employment data by the second quarter of 2014 so the board could see where the reductions occurred.
“What’s the overall plan to get the facility back and growing the market?” asked Mark Stipe, a board member.
Rigot said Hollywood officials are encouraged by recent economic development announcements bringing new people to the Baton Rouge area, including an IBM facility downtown. “Right now, in the short term anyway, we are challenged,” he said.
Stipe asked what Hollywood planned to do with the savings from employee reductions.
Rigot said the riverboat company would continue to invest in the property but “we don’t want to overinvest. We want to be cautious about what the market can actually deliver so we get a return on our investment.”
Both downtown riverboats have felt the impact of L’Auberge Baton Rouge, located off River Road south of the LSU campus.
A 2006 economic analysis — commissioned by the Belle and Hollywood as they tried to prevent a third riverboat casino from entering the market — said Baton Rouge could not sustain three riverboats and predicted one would likely fail.