The gaming industry has played a major role in the Coast’s recovery. The hurricane’s destruction was the catalyst to bring the floating gambling barges onshore, and the passage of the state law allowing casinos to locate 800 feet from the shore did that. Just three months after Katrina, three Biloxi casinos re-opened and were soon followed by others who converted onshore hotel space into gambling halls.
Three years later, 11 casinos are operating in Hancock and Harrison counties and employing 12,500 workers, giving the area a much needed economic boost.
“The recovery of Coast casinos has been remarkable,” says Larry Gregory, executive director of the Mississippi Gaming Commission. “Gross gaming revenue was at its highest in 2007 at $1.3 billion. No one ever expected the industry to rebound as quickly as it did.”
That revenue is in sharp contrast to gaming in other U.S. jurisdictions where the industry, once thought to be recession proof, is proving otherwise. The Biloxi gaming market is thriving and setting new records. In June of this year, the city reported $91.6 million in gross gaming revenue, almost $11 million above June 2007 for a 13.6% increase.
‘Strong tourist destination’
Rick Carter, co-owner of Island View Casino Resort in Gulfport, says the country’s slowing economy hasn’t had as great an impact for casinos on the Coast.
“The Mississippi Gulf Coast continues to be a strong tourist destination, a place where you can come to have fun,” he said. “And because we already had a loyal tourism base, we rebounded from Katrina to become, in some cases, even better than we were before, and we are a convenient drive-in market versus being dependent on airline business. I believe we will continue to do well.”
Island View, which opened in the fall of 2006 in the former Grand Casino site, currently has 1,500 employees. Carter and his co-owner, Terry Green, operated the Copa Casino prior to Katrina. The storm tossed that casino onto the middle of U.S. 90. Purchasing the Grand property north of the highway and renovating it, they feel, has given them the best gaming resort in the South.
“Opening Island View was a surreal experience for me. Right after the storm, we were all running on auto pilot, just trying to survive,” Carter says. “Once we understood the magnitude of the damage and the incredible challenges that lay before us, we realized the importance of fast-tracking a well-planned recovery for the Mississippi Gulf Coast.”
Looking back, he feels it’s hard to believe it has come so far. It has gone from the smallest casino in the market to one of the largest. “That took a real commitment from a lot of great employees and the support of many state and local officials, business and community leaders and residents,” he added.
In Biloxi, a couple of new gaming projects show faith in the recovering market, too. One is Harrah’s Margaritaville Casino, and the other is a project by Phoenix Gaming, which recently took over the former Bacaran Bay Casino proposal. Located on Caillavet Street, the project is now being developed by the Phoenix Gaming Group, LLC. It will be renamed in the coming weeks.
“The project is moving forward but is not complete yet. It will have a new name and logo,” said public relations director Charles McKellar. “No construction date has been set yet, but we are having no problem with investors.”
Managing director of Phoenix Gaming Group John Ed Ainsworth said, “Because it is one of the first master-planned, Las Vegas-style, land-based casino resorts being developed on the Mississippi Gulf Coast, potential investors have decided to project a new image for the project by renaming the casino and eliminating proposed condominiums from the project.”
He feels the record gaming revenues in Biloxi indicate the market is expanding despite a national downturn. “Biloxi is the most attractive gaming investment opportunity in the United States today,” he said. “This is why Phoenix Gaming Group believes the time is right for development of this resort.”
However, Harrah’s Entertainment announced a reduction in size for its Margaritaville project. The original $700-million estimated cost of the casino resort on the beach in Biloxi is being revised. As of June 30, the company has invested approximately $110 million in the project.
Harrah’s president Gary Loveman said the company slowed construction of Margaritaville Casino for a couple of reasons. “First, because business conditions in that market are very trying, and new capacity is not exactly what the market needs in the short term,” he said. “We intend to refine the scope and the cost estimates for Margaritaville Casino as carefully as possible to make sure we build exactly what we think is prudent in that market. We’ve slowed down the pace to regather ourselves to ensure it is appropriately sized and configured for the marketplace.”
Gregory is also cautious about the market. “America’s economy is characterized by cycles of expansion and recession, and the gaming industry is not immune to those cycles,” he said. “Yes, the economy is affecting the market as a whole in Mississippi as well as other gaming venues.”
He added that there are currently no other properties licensed to begin construction, but due to the market’s successful recovery from Katrina, developers remain interested in the Gulf Coast. There are, however, no other commitments at this point.
Carter says the slowing economy hasn’t had as great an impact on the Coast as on other gaming jurisdictions. “In good times and in bad, people need entertainment; they need fun,” he said. “On the Coast, guests can stay in a first-class hotel, have a nice dinner and enjoy an evening of gaming for a reasonable cost. That fact makes the Mississippi Gulf Coast a viable, competitive tourism destination in nearly any economic climate.”
Contact MBJ contributing writer Lynn Lofton at email@example.com.
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info