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Gaming, hospitality projects key catalysts to recovery

It took the country’s worst natural disaster to bring gambling off the water and onto land along the Gulf Coast. With the new law allowing casinos 800 feet from mean high tide, the gaming industry was and continues to be a strong economic catalyst for rebuilding the devastated area.

Two years after Hurricane Katrina, 11 casinos are operating in Harrison and Hancock counties providing employment for just more than 15,000 workers (approximately 1,000 fewer than before Katrina) and bringing in visitors and tax revenue. There are plans and talk of other casinos to join this lineup.

Accelerating pace

Soon after Katrina, Biloxi Mayor A.J. Holloway made what some thought was a bold prediction when he said there will be 18 to 22 casinos in Biloxi in the next seven to 10 years.

“I say that because if you check in communities that have suffered catastrophic storms — Charleston and Pensacola are two good examples — you find that whatever trends were occurring before the storm will continue at an accelerated pace,” he says. “I stand by my statement, although the cost of insurance, land and housing may slow it down slightly. But, I also want to take a step back and look at the big picture

“We’re talking about casino resorts. They offer a much larger experience than just a casino, and as a result, they have a much larger impact on the employment sector and on the overall economy.”

Holloway says that in the past 15 years, Biloxi went from a city on the verge of bankruptcy to a city with a vibrant economy. “Gaming and the hospitality industry in general are going to continue to be fuel for our economy. I hate to think where we would be in this post-Katrina world were it not for the revenue and jobs created by this industry.”

Gulfport attorney Len Blackwell likens the gaming industry to putting a Mento candy in a Coca-Cola to make a big fizz. “Our gaming model is a catalyst for tourism but not necessarily the main thing,” he says. “The casino resorts with more amenities are giving people more to do and we will see an enlarged group of tourists.”

‘Best model’ in U.S.?

Blackwell is a former member of the Mississippi Gaming Commission and currently teaches gaming law and policy at Tulane University’s Biloxi campus.

“I really believe we have the best model for gaming in the United States. It’s working and you can’t argue with success,” he says. “We will see more condotels and see tourists staying longer here. The convention center is taking bids on the expansion and that will enable us to compete with tier one conventions and bring in more families.”

He believes the area is now more attractive to big players in the gaming industry due to the 800-foot rule. “Harrah’s Margaritaville is a symbol of the confidence companies have in our market,” he says. “We’re known for honesty and fairness here. We’ll also be known for other things for tourists to do and evolve like Las Vegas evolved.”

Biloxi attorney Michael Cavanaugh has been involved with gaming since he represented the Europa Star, a ship that took passengers on a cruise to nowhere to provide gambling outside the state’s jurisdictional waters. He now represents several existing casinos and others in development stages.

“I think we’ll continue to see growth and development, mostly in Biloxi, and some in Gulfport,” he says. ”The major companies are already here. We’ll see some mid-level gaming companies that are capable of doing $400- to $500-billion projects.”

Into the Coast market

With acquisitions and mergers, he says there aren’t that many world-class gaming operators left. He predicts that some former gaming executives will get back into the Coast market. Two names that come to mind are Peter Simon, formerly of Mandalay Bay and now involved with a possible casino in D’Iberville, and Tom Brosig, formerly with the Grand Casinos.

“Keep in mind that the original development of Biloxi’s gaming began with entrepreneurs; start-up companies, not big ones,” he adds. “They blazed the trail here and will be the next wave, too. They will be able to put together resorts with amenities. They must do that to be competitive.”

He cites Bacaran Bay and the Hard Rock Casino as examples. Although the recently-opened Hard Rock does not have a large gaming area, it has many other things to offer guests. Both Cavanaugh and Blackwell say the planned Bacaran Bay resort will become reality in Biloxi.

“I think we’ll see something in D’Iberville, too, and the old Broadwater is a premiere site,” Blackwell said. “Bacaran Bay will happen. They’re putting financing in place. I get calls all the time from people wanting to open casinos here. Some are real and some are tire kickers.”

Roy Anderson III is one of the owners of the Broadwater property and he says there’s no news to report at this time. “Several companies are doing marketing studies on the Biloxi market and the Broadwater is on their list of interested sties,” he says.

Cavanaugh is a life-long Biloxi resident who remembers when gambling in this Coast town was without government oversight. He says it will be hard to get enough land mass, especially in East Biloxi, to build big gaming projects. The city’s long-term plan of a transportation loop will encourage more casino and condo development that will emerge as an entertainment/resort area. The area is bounded by Caillvette and Pine streets, Back Bay Boulevard and the I-110 Loop and there are some sites suitable for gaming.

“Biloxi needs more gaming sites if the mayor is correct in saying there will be 18 to 22 casinos in Biloxi,” he said. “We don’t have to do wholesale re-zoning but we must be judicious with it.”

Gulfport Mayor Brent Warr says his city will definitely have more casinos in the future, adding to the city’s diverse economy.

“There are gaming sites that are legal and we will welcome the growth of the industry in Gulfport,” he says. “I know of various interests that would like to come to Gulfport but I cannot speak to their stage of planning.”

Room for growth?

The Mississippi Gaming Commission’s executive director Larry Gregory says he realistically thinks there will be no more than five new casinos opening on the Coast in the next 10 years.

“That market has been stable for a long time,” he said. “Hard Rock Casino’s opening was the first new casino operator since 1999. Its opening clearly shows there is room for growth.”

He notes that financial investments will have to be large to be competitive and that the industry is working closely with tourism to re-develop the Coast into a resort destination.

“The era of dockside boats or barges on the Gulf Coast are gone,” he says. “To compete, the patrons are demanding bigger and better amenities. This provides for increases in employment, number of games, convention space, hotel rooms and other amenities. We are witnessing a transformation from gaming only to non-gaming. Retail associated with gaming will be more visible.”

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


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