http://www.latimes.com/business/la-fi-casino5sep05,1,6417906.story?coll=la-headlines-business
KATRINA'S AFTERMATH
Gambling's Number Comes Up in Mississippi
Floating casinos have been a boon to one of the poorest states in the
nation. All bets are off regarding a comeback.
By Jerry Hirsch
LA Times Staff Writer
September 5, 2005
Just a week ago the Grand Casino Biloxi gambling barge floated gently on
the Gulf of Mexico shoreline. Now it stretches awkwardly across the lanes
of U.S. Highway 90 in Mississippi, ripped from its moorings by the storm
surge that followed Hurricane Katrina.
The 106,300-square-foot structure about the size of a Target department
store is a total loss, along with its 2,800 slot machines and 89
roulette, craps and blackjack tables.
"They will have to break it up and cart it away in dump trucks to get the
highway open," said Larry Gregory, executive director of the Mississippi
Gaming Commission.
When that happens, workers will haul off a large piece of an industry that
has helped revive this corner of one of the poorest states in the nation.
As the gaming companies search for their employees, and make sure they have
paychecks and medical insurance that will work in neighboring states, no
one is predicting how long it will take for the industry to come back.
Until Katrina swept through Hancock, Harrison and Jackson counties,
visitors to the state's Gulf Coast left more than $1.2 billion annually in
the coffers of the 13 casinos that in little more than a decade have
transformed a once-sleepy backwater into a thriving tourist destination.
"The Mississippi Gulf Coast had almost no economy before the casinos came,"
Gregory said.
In the 13 years since the first casino opened, the state's coast has
grabbed a 4% share of the nation's gaming market, not including Indian
gaming establishments, helping to make Mississippi the nation's
third-biggest casino state, after Nevada and New Jersey.
Other measures also demonstrate the economic improvements the industry has
wrought.
Thanks to casino jobs and tourism employment, the region's jobless rate
last year averaged 4.2%, at least a full percentage point below the
averages for Mississippi and the nation.
The median per capita income of $24,811 by the Gulf Coast's 370,000
residents is 4.4% above the state figure, according to the Harrison County
Economic Development Commission, though it's still about $6,000 below the
national median.
The coast's casinos pumped $49 million in tax revenue into the region's
local governments in fiscal 2005 and $99 million into state coffers, the
gaming commission said. The figures don't include the millions of
additional dollars collected by the state and local governments in the form
of lodging and sales taxes generated by visitors to the area.
"This money was really important to Mississippi, which for decades has
suffered from an inability to collect tax revenues," said John Gnuschke,
director of business and economic research at the University of Memphis.
And just before Katrina, the coast's gaming industry was poised for even
more growth.
An 11-story, 306-room Hard Rock Hotel & Casino was scheduled to open last
week, the first new casino on the state's coast since 1999. Gregory said
the $235-million project may be a complete loss.
Likewise, several continuing improvements at the Isle of Capri property in
Biloxi, including 400 additional hotel rooms, a new parking garage and new
casino barge, suffered "extensive damage" and could be a total loss.
Harrah's Entertainment Inc., the Grand Casino's owner, also lost its Grand
Casino Gulfport nearby. Still, Harrah's, the world's largest gaming
company, said it wouldn't abandon the region.
"We will build them bigger and better," Chief Executive Gary Loveman said.
But just a week after Katrina carved her destructive path through the Gulf
Coast, no one knows how well or how quickly the casino industry will bounce
back and whether the 11 million tourists who once streamed to the area from
nearby states such as Alabama, Florida, Tennessee and Texas will still want
to visit, said Gnuschke, the University of Memphis economist.
"It is a chicken-or-the-egg thing," Gnuschke said. "You need the casinos to
get the people and you need the people for the casinos. Then you need homes
for the workers and all the ancillary things like hotel rooms, restaurants
and everything else."
No one yet has made a formal assessment, but Gnuschke said it would take
years to rebuild the industry.
Almost overnight, "one of the top tourist destinations in the state"
vanished, said Webster Franklin, chief executive of the convention and
visitors bureau in Tunica, a rival Mississippi gambling region near
Memphis, Tenn., that escaped the storm.
Exactly where the industry will rebuild is a matter of a debate.
The 1990 law that legalized Mississippi gambling required that casinos
operate only on ocean waters or the Mississippi River. The law was a
compromise between the opponents of gambling in the conservative, Bible
Belt state and lawmakers, who wanted to capture tax dollars that were
floating away on gambling cruises that left the coastline for the
international waters of the Gulf of Mexico.
"They thought this would keep gambling from becoming part of the fabric of
the society," said Gregory, the state gambling regulator.
Harrah's wants the right to rebuild on land.
"There's too much potential for danger having gaming on water," said
Alberto Lopez, Harrah's spokesman.
The company's casino in New Orleans a much smaller gambling market also
shuttered by the storm is built on land and survived the full force of
Katrina relatively intact, he said, suffering $200,000 in damage.
"This will be the No. 1 issue facing the legislature," Gregory said.
*
(BEGIN TEXT OF INFOBOX)
Big betting
Biggest casino states based on 2004 casino gaming revenue
(In billions)
Nevada*: $10.6
New Jersey: $4.8
Mississippi: $2.8
Indiana: $2.4
Louisiana**: $2.2
Figures do not include Indian gaming
*Locations with gross casino gaming revenue of at least $1 million.
**Includes racetrack casinos
Source: American Gaming Assn.
================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923 Fax: 713-743-3927
antunes at uh dot edu
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