South Mississippi casino industry celebrates 22 years amid both gains and setbacks

A new report from the state Gaming Commission shows the investment being made in amenities at casino resorts is starting to pay off. Comparing numbers from March through June, gross revenue at the casinos is up compared with a year ago. The casinos have more employees, are hosting more conferences and have more visitors coming through the doors. Casino hotel occupancy is at 95 percent and 552 new hotel rooms are under construction. Revenue, visitors and employees remain below pre-Katrina numbers.

Margaritaville will be the second Mississippi casino to cash in its chips this year: Harrah's Tunica closed in June. On the surface it might look like a trend, said Allen Godfrey, commission executive director. "They're two completely different circumstances why they closed," he said.
Competition has hurt the Tunica market. When river flooding closed the Tunica casinos in 2011, the operators of a racino in Arkansas advertised to Tunica's Memphis customers, many of whom now gamble closer to home.

In Atlantic City, casino operators lost customers and billions of dollars when neighboring Pennsylvania legalized casinos. Four casinos there are closed or threatened with closure by the end of summer, taking 9,000 jobs with them.

At Margaritaville, the closing comes as the operators reportedly owe millions to the landlords and can't come to an agreement to allow for the construction of a hotel and other amenities. So does South Mississippi have too many casinos? And is there the possibility the casino industry could go the way of video stores? Or is there no simple answer to the challenges the industry faces?

Officials say a 13 percent upswing in casino revenue in June is an indication the sky isn't falling on the Coast casino market. The strong month turned the revenue for the first six months from behind last year's pace to $1.5 million ahead of 2013 winnings.

"I think that the right casinos have to come along and the amenities have to be correct," said Richard Bennett, chairman of the House Gaming Committee. "I think Margaritaville was the perfect example of why casinos need hotels and amenities."

Biloxi Boardwalk with a water park, an adjacent marina and other amenities is proposed for just north of Margaritaville. Bennett said, "If done right, I think it could add a lot to the industry. That has the potential to grow the market."

The monthly casino-revenue reporting is just one look at how the casinos are faring, said Godfrey, who visited three Coast casinos last week. He said people are in the pools and at the restaurants.

New hotels, restaurants and other amenities are what Coast casino operators are investing in, he said. "They (the casinos) wouldn't do it if they didn't think they could make money at it," he said. "You've got to have a reason to come to the Coast. Gaming is not the reason anymore." In Las Vegas, the mix of amenities to casinos is 60/40 percent, and he said, "they're thriving."

Former state representative and Tourism Committee chairman Diane Peranich said for the casinos to make the required investment, state legislators need to look at the casino industry as it would shipbuilding and auto manufacturing and provide similar tax incentives and tax breaks. "If casinos invest and bring jobs in Mississippi, they need to have as much consideration as any other industry," she said.

Godfrey said the challenge that will never go away for South Mississippi's casinos is other companies are expanding and trying to do the same things to gain market share.