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Mississippi Economic Forum speaker compares gaming markets in state with the industry in Louisiana

JACKSON — The health of the gaming industry is good in Mississippi as Coast casinos rebuild and reopen following Hurricane Katrina. However, there are threats down the road.
Gaming attorney Dan McDaniel of the Phelps Dunbar law firm in Jackson says the biggest threat to Coast casinos is the possibility of the Mississippi Band of Choctaw Indians building a casino on tribal land in Jackson County.

“A Choctaw casino there would take a huge amount of revenue from the Biloxi casinos,” he said. “The tribe pays no taxes to the state and is not regulated by the state.”

McDaniel, who made the comments in an address to the Mississippi Economic Forum in Jackson July 26, 2006, says native tribes have no geographic restraints although there is a bill in the U.S. Congress to limit Indian gaming. As sovereign nations, tribes must get permission to open casinos from the Bureau of Indian Affairs but are not bound by state laws. He noted that the bill was recently blocked in the U.S. Senate by Mississippi’s Sen. Thad Cochran.

The Choctaws, who own land near Interstate 10 between Ocean Springs and Gautier, have stated they will not open a casino at the site without the support of voters in Jackson County through a non-binding referendum.

“It’s sure to be a heated campaign,” McDaniel said. “There is controversy about this going on all over the country. I suggest everyone watch that, and also remember that the Indians have a compact with the state that was signed by Gov. Kirk Fordice. There was no action by the Legislature. It’s like a contract but is it legal?”

Larry Gregory, executive director of the Mississippi Gaming Commission, says the biggest threat to coastal gaming is another hurricane and only after that danger would he list a Choctaw casino.

“I would be shocked if the citizens of Jackson County would want a casino not paying taxes to locate there,” he said. “There’s a long way o go before it can happen. It’s a far-off threat; not imminent. The chief has said he will abide by the non-binding referendum.”

Gregory is optimistic that 13,000 of the 15,000 pre-Katrina casino jobs on the Coast will be re-established before the end of the year. “All the existing casinos that were there prior to Katrina will be open by early September with the exception of the President which was closing anyway and Casino Magic Biloxi which decided to sell out. One year later I never would have thought we’d be where we are.”

In addition to the five casinos already open in Biloxi, the Beau Rivage and Grand are scheduled to open this month. In Gulfport, the Island View Casino, formerly the Copa, plans to open in September followed by the Hollywood Casino, formerly Casino Magic, in Bay St. Louis.

Later this fall a new casino, the Silver Slipper, is slated to open in Hancock County. The Biloxi Hard Rock that was just days away from opening when Katrina struck is planning to open on July 4, 2007.

“We’re making great progress and seeing an economic explosion on the Coast,” Gregory said. “We’re moving ahead and what’s happening is absolutely good. The casinos that are opening in temporary quarters are beautiful and don’t look temporary at all.”

The Gaming Commission is anxiously awaiting upcoming gaming revenue reports. With only three Biloxi casinos generating $65 million per month in revenue earlier this year, Gregory expects to see a spike, possibly record breaking tally, as more gaming houses open.

McDaniel, who is president of the International Association of Gaming Attorneys, practices gaming law in Mississippi and Louisiana and was actively involved in establishing gaming in Mississippi. He pointed out differences in the regulations of the two states. Mississippi, like Nevada and New Jersey, has unlimited licenses. Currently there are 28 licenses in Mississippi. Louisiana has a state statute that limits the number of licenses to 15. These are given out by a bidding process.

“There’s a lot of what I call tire kicking going on right now on the Coast with investors looking for gaming sites and projects,” he said. “Will there be tons of new casinos? No. For every 10 proposals, one makes it through.”

He said the process to obtain a license is long and thorough, comparing the investigations to cabinet level background searches. The investigations are both corporate and individual with every person who owns five percent of an involved company investigated.

“In Louisiana they keep up with all the casino news from the Coast. Whatever runs in The Sun Herald about casinos also runs in The Times Picayune and the Baton Rouge Advocate,” McDaniel said.

A major difference in the two states are the other types of gaming in Louisiana that Mississippi does not have. That includes video poker slot machines at truck stops and race tracks.

Both states have business people on their gaming regulatory boards and have a business friendly attitude toward the industry. “Gaming companies tend to be treated like other businesses and accepted as an industry in Mississippi,” he said. “They can give political contributions here but not in Louisiana. Only the video poker truck stops can contribute there. They seem to have more clout.”

The two states operate their regulatory agencies much the same way although McDaniel sees some jealousy from Louisiana as to Mississippi’s growth. “They want to change the industry there. They think it has peaked out and don’t know how they can change it,” he said. “It’s constantly moving here. You can see it in the amount of infrastructure being built. It’s very competitive here.”

Contact MBJ contributing Lynn Lofton at llofton656@aol.com.


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