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Closures will cost about $62 million in lost tax revenue by December 31

Despite hurdles, gaming outlook surprisingly rosy

Soon after Hurricane Katrina ravaged a dozen coastal casinos in the wake of the August 29 storm, industry executives huddled to regroup amid speculation that some of the players might not return to the Mississippi Gulf Coast. Since then, almost every casino has pledged to rebuild on or near the same spot.

“A few years ago, if I’d heard that any company was considering leaving the Mississippi Gulf Coast, it would’ve raised hairs on my neck,” said Mississippi Gaming Commission director Larry Gregory. “I no longer have that same fear, because so many developers want to invest in this market. My prediction is that, within the next few years, we’re going to see a different face on Mississippi, with new players. Within the next two years, we’re going to have more casinos on the coast than we did prior to Katrina.”

Hurricane storm surges shoved some gaming barges across U.S. 90 and virtually destroyed others, including the new Hard Rock Hotel & Casino scheduled to open the following week. The destruction was so far-reaching that many people consider it miraculous that three Mississippi Gulf Coast casinos plan to reopen, at least temporarily, by the end of the year.

“First of all, it’s going to be a challenge to get them open,” said Gregory. “My main concern is not to open them prematurely. We have to sign off on public safety and transportation issues and other things. They must be done in a calm and methodical fashion. We shouldn’t rush to open the doors because crowds are anticipated in great numbers, much like retail stores the day after Thanksgiving.”

There’s heavy pressure to reopen casinos, especially since state and local governments will have lost roughly $62 million in gaming tax revenues by December 31, a loss that is accumulating at an alarming rate of $500,000 per day.

Imperial Palace in Biloxi plans to reopen December 20, followed by the Isle of Capri in Biloxi December 26, and Palace Casino in Biloxi December 30. The three casinos plan to put 2,500 of the industry’s 17,000 area employees back to work.

Within the next six months, Boomtown Casino in Biloxi plans to reopen on a barge in a slightly different locale, while building on land. Casino Magic Bay St. Louis should reopen within nine months. Treasure Bay plans to reopen next September, and the Silver Slipper hopes to begin construction this month and open in 2007. Copa Casino in Gulfport plans to build a new land-based facility and open within two years. Hard Rock plans to rebuild, but no timeline has been announced.

Beau Rivage in Biloxi decided against opening a temporary casino and instead plans to reopen a remodeled hotel, casino and other amenities August 29, 2006, the first anniversary of Hurricane Katrina’s landfall. The resort’s golf course is scheduled to reopen next fall.

In January, the Gaming Commission is expected to approve the proposed Bacaran Bay Casino in Biloxi, which would immediately proceed with construction. Landry’s, a Houston, Texas-based restaurant chain that owns Rainforest Cafes and Golden Nugget casinos in Las Vegas, has proposed building a $400-million Biloxi casino development that would employ 3,000 people and feature a hotel and marina, Ferris wheel, thrill rides, dancing fountains and an aquarium restaurant.

Harrah’s Entertainment, owner of Grand Casinos in Biloxi and Gulfport, has not yet made an announcement on rebuilding. “Harrah’s has let it be known they’re coming back, and they’re in the process of creating such a magnificent complex that they’re not ready to release information yet to the public. When? Only Harrah’s knows,” said Gregory.

Even though rumors have circulated that Pinnacle Entertainment, owner of Casino Magic Biloxi, will use insurance money to invest in St. Louis, Mo., properties instead of rebuilding on the Coast, company executives have not yet divulged their plans.

“I met with their CEO, Dan Lee, in Las Vegas right after Hurricane Katrina and he expressed to me all intentions of returning to Mississippi,” said Gregory. “I take him for his word.”

Gregory said he was not concerned that already reopened Louisiana casinos would alter gaming customers’ traffic patterns and divert business away from Mississippi Gulf Coast casinos.

“Not at all,” he emphasized. “The most common concern I’m hearing from operators is getting their people back to work. That’s been their biggest priority from day one. Some have tried to help by paying 90 days’ wages, but that time has run out.”

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.

About Lynne W. Jeter

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