Louisiana's governor is taking a possible riverboat casino tax hike off the table, a decision that boosted shares of
( HET) Wednesday.
Gov. Kathleen Blanco said Tuesday she had decided not to pursue a tax increase on riverboats, although her office continues to consider raising taxes at other gambling sites as a way to help fund teacher pay raises. Her press secretary, Denise Bottcher, confirmed the comments, which local television station KTBS 3 originally reported.
The news didn't filter into the market until Wednesday afternoon, when several analysts noted the governor's comments in research reports. Harrah's shares traded as high as $66 before finishing the session up 32 cents, or 0.5%, at $64.81. It was mostly a down day for casino stocks, with the Dow Jones U.S. Gambling Index finishing down 1%.
Harrah's has two riverboat casinos in Louisiana, in addition to its land-based New Orleans casino and a racetrack casino, or racino, at Louisiana Downs.
, which Harrah's is in the process of acquiring, also has a riverboat casino in New Orleans, but its shares finished down 5 cents, or 0.3%, at $19.77 Wednesday.
The gaming tax on riverboat casinos is 21.5%, but the governor's office had been considering raising all gaming taxes to 32.5%. Other rates are 18.5% for slots at racetracks, 22.5% for video poker at racetracks, 26% at bars and restaurants and 32.5% at truck stops.
The potential for a Louisiana tax increase had weighed on Harrah's shares recently. Bear Stearns analyst Joseph Greff had forecast an annual EPS impact of as much as 15 cents for Harrah's.