Are Mississippi casinos beginning to make a comeback?
NATCHEZ — Mississippi’s casinos have stopped a steady, five-year decline in revenue, and industry experts say the downward trend could reverse in 2012.
Since 2007, the Mississippi Department of Revenue has reported a steady annual loss of gaming revenue, falling from $2.89 billion that year to approximately $2.24 billion in 2011.
According to the Mississippi Department of Revenue, in the first quarter of 2012 gross casino revenues were $611,559,018.17, comparable to 2011’s first quarter, in which revenues were reported at $610,756,837.
That million-dollar gain is a drop in the gaming industry bucket, but it could signal a turnaround in the gaming industry economy. Similar reports are being observed industry wide.
“We are seeing in Mississippi not only a significant milestone in the first quarter, but we saw at least 11 of 13 similar markets we monitor make similar gains, and that is encouraging,” said Scott King, director of research for the Mississippi Gulf Coast Business Council and who also works with the Mississippi Casino Operators Association.
“I don’t think anybody is sitting here expecting Mississippi to return to 2007 levels, but our operators are getting more confident where they can hire more people and get those local economic engines going.”
Like other industries, the gaming industry will depend on a national recovery, said Eddie Williams, deputy director of the Mississippi Gaming Commission.
“You can look at the numbers and tell that certainly we followed the economy across the nation in 2007 as the numbers started to fall,” he said.
“I certainly don’t think that we will see the declines that we have seen, and hopefully — if the economy stays in that recovery state — we won’t see those declines and will start to see some gains.”
But the national economy isn’t the only indicator that the gaming industry may be turning around. King said observation of the industry shows that the luck of casino operators is changing.
“Mississippi was the last one into the recession and the last one out, and over the last couple of years we have seen a lot of other (gaming) jurisdictions start to come out,” he said.
Flooding in 2011 also affected the river county casinos, and statewide settlement money from another natural disaster — the 2010 gulf oil spill — dried up.
“In 2010, we had a lot of BP (settlement) money, and that artificially inflated the economy,” King said. “When that money vacated the coast and was phased out, coupled with high gas prices there was a lot of downward pressure.”
Approximately 75 percent of Mississippi’s gaming visitors come from out of state, and King said because Mississippi is a drive-in market high fuel prices will always be a concern.
“The volume of visitation wasn’t impacted (by fuel prices) as much as the average spend was,” King said. “Folks still came, but they might not stay as long and might spend a little less.”
The economic downturn wasn’t the only factor that affected the gaming economy. New competitors were also squeezing it.
“There are emerging jurisdictions all over the country that have increased the amount of the competition, for example, the expansion of class two bingo in Alabama, some Arkansas racinos,” Williams said.
While some casinos have closed — Grand Station in Vicksburg and the Jubilee in Greenville — others are rising to take their place. Jubilee will merge with Lighthouse Point Casino to become Trop Casino, and Magnolia Bluff Casino is slated to open in Natchez in December.
The sale of the Isle of Capri property in Biloxi to Golden Nugget Inc. was recently announced, and the Margaritaville Casino is slated to open in May.
Isle of Capri Spokeswoman Jill Alexander said the company declined to discuss the reasons for the sale, stating that, “We look at every opportunity that presents itself and make a decision from there.”
Alexander said she does not anticipate the sale will have any impact on the corporation’s Natchez property.
The fact that new properties are opening and others are being bought points to a turnaround in the overall economy, King said.
“We think before the storm — Hurricane Katrina — and before the recession, there were a lot of folks interested in the Mississippi market, and all these things that happened brought their projects to the sidelines,” he said.
“Every recession has been followed by a recovery, but there are more and more signs that that recovery is sticking in Mississippi.”
Mississippi’s river county casinos accounted for approximately 53 percent of 2012’s first-quarter revenue. Gulf coast properties earned approximately 47 percent.