Gaming continues to be a good deal for Mississippiby David Grisham
GULFPORT — August 2017 — As the gaming industry celebrates 25 years, the focus is on the future and the challenges and opportunities that lie ahead. It’s a forward-looking, forward-thinking industry that never sleeps. Perhaps that is why the industry has not only enjoyed explosive growth, but has also overcome natural and manmade disasters, a major recession and increased competition during its first quarter century.
As gaming marks its 25th year in Mississippi, the state’s gaming industry will have generated about $56 billion in gaming revenue, with annual gaming revenues peaking at almost $2.9 billion statewide in 2007. River casinos, including Tunica, Greenville, Vicksburg and Natchez, had their best year in 2006 as casinos on the Gulf Coast were recovering from Hurricane Katrina. River casinos brought in close to $1.7 billion in gaming revenue that year.
|The Gulf Coast rebounded from Katrina.|
The comeback on the Gulf Coast in the aftermath of Hurricane Katrina, the costliest natural disaster in the history of the United States, is an amazing story of resiliency. Going from coastal casinos being completely wiped out in 2005 to record-breaking revenue totals in 2007 to another resurgence along the Coast over the past few years is proof that this state’s gaming industry has the vision, leadership and can-do attitude to succeed under the most extreme circumstances. Looking back, it is difficult to grasp how so much could have been accomplished in such a short period of time. Legislative action that allowed land-based casinos along the Mississippi Gulf Coast played a key role, clearing the way for the industry to rebuild and reinvest in the market.
The Deepwater Horizon oil spill in the Gulf of Mexico in 2010 and the Great Mississippi River Flood of 2011 posed additional challenges for the industry. National news coverage of “the spill that couldn’t be contained” impacted tourism, and the rising water from the Mississippi River flood in May 2011 forced river casinos to close for the first time ever.
|The 2011 flood impacted the Tunica, Mississippi, market.|
As the water rose, parking lots were submerged, fish could be seen swimming across the roads going to and from the casinos, and the angle of the ramps leading up to the gaming barges became more severe with each passing day. After the water receded, the cleanup began. The Mighty Mississippi had left a massive amount of mud and debris behind. And, while the river casinos remained closed, gamblers found other places to play. Each disaster presented its own set of distinct challenges, but the gaming industry and its employees answered the call in every instance.
“We are really proud of our gaming operators for their tenaciousness in dealing with the challenges we have had to overcome in Mississippi,” said Michael Bruffey, deputy director of the Mississippi Gaming & Hospitality Association. “The gaming industry is noted for leading the way in recovery and rebuilding, such as after Hurricane Katrina or the river flooding in the north. Casino employees are also to be commended for their care of their communities.”
|Gold Strike in Tunica, Mississippi|
Looking at the performance of Mississippi casinos by region since 1994 (the first year revenue was published by region), river casinos have generated more than $30 billion in gaming revenue to date. This compares to more than $24.5 billion for Gulf Coast casinos. This is no surprise considering revenue at river casinos outpaced that of Gulf Coast casinos every year from 1994 to 2013. Since 2014, though, Gulf Coast casinos have held the advantage, enjoying three consecutive years of year-over-year revenue growth while river casinos have experienced four consecutive years of revenue decreases. In fact, 2016 river casino revenue was the lowest recorded since 1994. Unfortunately, it’s a distinction 2016 shares with 2015 and 2014.
Webster Franklin, president and CEO of the Tunica Convention & Visitors Bureau, said there is a story behind the numbers that can’t be ignored. “To know where we stand today in Mississippi 25 years after the arrival of the gaming industry in the state, one has to understand the changes that have taken place. Every American is now within a three-hours drive of a casino. When gaming first came here it was only available in Mississippi, Nevada and Atlantic City.”
Franklin added that while competition has impacted the Tunica market, so too has the lingering impact of the 2011 flood. “After Katrina, the legislature was keenly aware that we needed to change and allowed casinos on the Coast to build on land. The gaming industry reinvested in the Gulf Coast and it is a remarkable product. After the 2011 flood, the legislature did not convene to allow the industry to redevelop on the protected side of the levee. Considering of the competition and the effects of the river, the legislature needs to allow the industry to redevelop in Tunica County along Highway 61, on the protected side of the levee.”
Franklin said he believes these changes combined with the favorable tax rate of 12 percent would provide the incentives for gaming companies to reinvest and build new and better properties, allowing Tunica to be more competitive.
“It’s important, because Tunica gaming has provided more than $1.7 billion to the Mississippi General Fund and another $800 million locally, and thousands of Mississippians receive $200 million in annual payroll,” Franklin explained. “Gaming has also provided the funding necessary to improve our infrastructure and attract new industry. We would not have Schulz Xtruded Products and Feurer Powertrain (in Tunica County) without the infrastructure gaming has allowed.”
For all of these reasons and more, he said, government leaders should take steps to ensure the success of gaming for the next 25 years. Reprinted from the August 2017 issue of Mississippi Louisiana Gaming News. Access the magazine at this link: MS LA Gaming News