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Gaming Local Development Agreement: The importance of getting it right
Posted in Government

It’s important for cities and towns to legally ensure that a casino developer provides the resources that are necessary to maximize the benefits and minimize the impacts that come along with casino gaming in a new location.

Multiple gaming jurisdictions (both new and mature) all around the country are either contemplating or fully embracing the construction of new casino-resort facilities. As a result, numerous local governments are on the verge of directly or indirectly hosting a business enterprise that is unlike any other they have hosted or interacted with before. In each instance, the affected cities and towns are facing the sometimes exciting, sometimes daunting, but always precarious prospect of negotiating multi-faceted long-term arrangements (sometimes referred to as local development agreements, or “LDAs”) with a sophisticated gaming counter-party.

Effectively managing this process can be the difference between a local community receiving an enduring and meaningful stream of revenue from the casino, and nothing. In Indiana alone, where 11 casinos have entered into LDAs with host and surrounding communities, numerous LDAs have proven to be rife with loopholes, oversights, lack of adequate forethought, and unfounded assumptions. The result? Staggering disparity in revenues to local governments. Tension and distrust between host/surrounding communities and casino operators. Contentious LDA renegotiations. Gaming Commission investigations. Costly and lengthy litigation. Even allegations of corruption and misuse of public funds. Some communities who once enjoyed the benefits of gaming were on the verge of losing every cent of their gaming revenues because the original LDA was poorly conceived.

When negotiating a new or revised LDA, local units of government can benefit greatly from understanding the motivations and past practices of casino operators, as well as the mistakes (and successes) of other similar communities.

In light of this, it’s important to work with a firm that has developed substantial experience representing state and local government interests, as well as multiple casino operators, on LDA-related matters. With proper counsel, your LDA is more likely to become a valuable stream of revenue for your city or town by obtaining financial benefits that help achieve a wide variety of local improvements and mitigation efforts, such as new roads and key infrastructure, bond banks, hotels and convention centers, museums, and even major athletic arenas.

If you have a question about an LDA, please contact us.

To learn more about Philip Sicuso and his practice, visit his profile.



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