Reworking the way casinos are made in Mississippi

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Published: February 4,2013

“You need more than just casinos. Slot machines are slot machines. You need to have a reason to come.”

That basic logic by Executive Director Allen Godfrey is the impetus behind a sweeping proposal by the Mississippi Gaming Commission to modify regulations for new casinos in the state.

Among the new regulations are requirements that properties have at least 40,000 square feet of gambling space, at least 300 hotel rooms (an increase from 250) and space to park at least 500 vehicles. Other requirements include a restaurant that can seat at least 200 people and a fine-dining restaurant seating that would 75 or more. It also calls for the hotel quality to increase from two-star to four-star.

Regulators could vote the proposal, which is awaiting any written comments, on in March.

Existing casinos are not affected by the proposed regulations, but if they were, the only 10 of the state’s 30 casinos would meet the first three requirements of 40,000 square feet, 300 rooms and 500 parking spots. Five of those casinos are in Tunica County and four are on Gulf Coast and one is in Lula.

But the proposal does have flexibility that allows exceptions, based on what’s best for the community. More importantly, the commission has flexibility in making decisions based on what new amenities casinos bring the community. The commission says new developments need “an amenity that will be unique to the market and will encourage economic development and promote tourism.”

“The gaming commission is tasked with making sure a certain project encourages economic development and promotes tourism,” said Godfrey.

“What we’re attempting to do is encourage developers to not only bring more slot machines and restaurants, but to bring an amenity that will promote tourism and draw people to Mississippi who might not otherwise be coming to Mississippi.

“Consider post-Katrina and look at all of the amenities just on Highway 90 that are no longer there. Putt-putt, water park, oceanarium – they didn’t return. A lot of these type places are reasons people came to the Gulf Coast, and they’re not there anymore.

“So we’re trying to encourage people to invest in something that is going to draw people back to the Gulf Coast because its such a pretty place to visit.”

Tunica has been hurt by competition from gambling in other states, and especially by Southland Race Park, a dog track in West Memphis, Ark., that offers reel games, blackjack and video poker.

“That area is going through some pains right now,” said Godfrey. “Lot of it has to do with Southland Race. It is really hurting them a lot. There have been a number of properties up there that have changed hands and are struggling.

“Five years from now, it could be a different story, and I hope it is. There are some nice properties up there. But they’ve got to find a way to get people to visit their properties.

“But they will figure it out because there are some very good business people up there who have the knowledge to work this thing out.”

When casinos first opened in 1992, there wasn’t an infrastructure requirement. That came about in 1992 and it stated that casinos must make a 25 percent match. “That meant if you had a $10 million casino, you had to invest $2.5 million in the infrastructure of the property. That was because a lot of riverboats came in almost overnight. We wanted something to still be there when the riverboats left.

“A few years later we went to a 100 percent match. Generally speaking most of the casinos were built by then. The first one under the 100 percent match, if memory serves me, was the Beau Rivage, which was a $750 million project.

Then Hurricane Katrina hit the Gulf Coast, followed by a economic recession.

And throughout all this period, competition all around us has increased dramatically,” said Godfrey. “In the meantime, the feeder markets we once had now have gaming in their back yard. We’re more of a drive-in market, so it’s been more of an issue of what’s it going to take to create to make more people to the state.”

“We set these bars and numbers, but we would reduce that number if you’re going to bring an amenity like a water park that would bring people to the Gulf Coast,” said Godfrey. “If all were looking for is more slot machine and more food courts, we would have reduced the regulations.”

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