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New pilings law allows gaming barges better protection

Even though there have been numerous shut-downs of Coast casinos due to bad weather, the horror of a category five hurricane has not blown through since gaming was legalized in the state. Still, the loss of lives, property and revenue to the state remain a threat during this busy hurricane season that doesn’t end until November 30.

Weather experts say we’re in for a decade of active hurricane seasons and some gaming companies are getting ready to batten down their gambling barges before the big storm arrives. During the 2005 legislative session, lawmakers made that task easier with the passage of a new state law that allows casinos to elevate their barges on pilings or take other engineering measures to protect against storm surges.

Rep. Bobby Moak (D-Bogue Chitto), who chairs the gaming committee in the House, says several casinos are going to utilize the new pilings law that became effective last month, and it’s not just Coast casinos that will benefit.

“Lakes Gaming in Vicksburg will use this new method along with new casinos coming in on the Coast,” he said. “I’ll be surprised if anyone coming in with new construction doesn’t use it. It means longer life for them and a lot of maintenance issues will go away. We’re not here to create more expenses for the casinos. They can use that money for other things.”

Addressing concerns

The pilings can be steel or concrete and will help gaming barges withstand higher winds, but does not allow them to create new locations.

“We’ve sent a message to the industry that we can keep up with them and address concerns,” Moak said. “We’re becoming more competitive with other states, and we have a long way to grow this market.”

Danny McDaniel, attorney for Lakes Gaming, confirmed that the Vicksburg property will be placed on permanent pilings. “The statute applies to the river and coastal counties. Lakes’ location is low and will have flooding every year,” he said. “It’s a very good thing for them.”

In addition to being safer for the new casino, McDaniel said putting the barge on pilings will save $3 to $4 million on construction costs. These costs will not be shaved off the overall cost but will be put back into the infrastructure.

“It’s really a positive thing for gaming, business wise,” he said. “When the Legislature passed this statute, they did more to help the gaming industry financially, with safety and other ways than anything since gaming was first legalized.”
The Jackson attorney says a lot of legislators were involved in passing the legislation, but Moak deserves a lot of credit.

“It’s a huge improvement and will really help,” he added.

McDaniel also represents the proposed Havana Casino to be built on Biloxi’s Back Bay and says that barge will use permanent pilings as outlined in the new law, too.

Limiting exposure

One Coast casino that is definitely investigating the new law is Treasure Bay in Biloxi. The pirate-themed gaming vessel is in an exposed location and was briefly closed twice last month due to storms. In 2002, the casino had considerable damage from the tidal surge of tropical storm Isidore and was closed for three weeks. The boat sometimes rocks during thunderstorms, too.

“We’re pretty excited about the new legislation and are having a lot of discussion as to what it means,” said Susan Varnes, vice president and general manager. “We’re working now to figure out what is legal and without challenges.”

Treasure Bay has been trying to move to a more protected location for the last few years. After two years of obtaining the necessary permits, the move was held up by a legal challenge. Varnes says that delay turned out to be a good thing and now the casino can work within the new law to secure its barge.

“We’re one of the few casinos that hasn’t developed all of its land, and we’re exploring building a brand new structure in compliance with the new legislation,” she said. “It would be more stable and not so exposed. We’re happy that the Legislature recognized we need to secure our sites.”

Moak says the legislation specifically mentions that casinos are not to move onto land. “The law is not meant for that and that issue was addressed right up front,” he said. “The casinos can use this law where they are now.”

He doesn’t see land-based casinos in Mississippi’s future, noting that legal challenges to such a change would surely come. “If they are no longer confined to certain areas, it becomes wide open and there’s no more exclusivity,” he said. “Those communities that now have gaming would fight land-based gaming.”

Lost revenue’s impact

The state does, however, need to look at lost revenue when casinos are closed because of hurricanes even though gaming companies will build to withstand as much of mother nature as possible, Moak says.

“It’s a huge concern, and we have to think about it and look at it as a state,” he said. “We must look at lost taxes and how closures affect employees. Other industries are not subject to down time like casinos. We probably need to look at something that will protect the state.”

In the fiscal year just ended, the gaming industry meant some $112 to $114 million to local cities and counties and $335 million to the state. Additionally, $1.1 billion in wages was paid to the approximately 30,000 gaming employees with many vendors and suppliers also benefiting.

The industry’s 2% to 3% growth rate does not concern Moak who feels the industry still has far to go in Mississippi. “As an open competition state we can grow. We’re bringing in new casinos and that brings additional employees and wages,” he said. “That means the state will collect more employer taxes and gaming revenue. The open marker works and I’m very positive about the industry’s future in Mississippi.”

He says that’s why it’s important for the state to not take money from local governments, who must provide infrastructure, schools, police and fire protection for additional gaming employees moving to these areas.

Also, he sees the maturing market adding other things besides gaming. The new casinos are bringing more dining, entertainment and shopping. “It hasn’t topped out yet. We have a long way to go,” he said.

Contact MBJ contributing Lynn Lofton at mbj@msbusiness.com.

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