Expert: Local market expansion for gaming revenues years away

Published 12:15 am Saturday, June 22, 2013

Jay Sowers / The Natchez Democrat — Patrons walk toward the entrance of the Isle of Capri Casino on Silver Street Friday afternoon in Natchez.

Jay Sowers / The Natchez Democrat — Patrons walk toward the entrance of the Isle of Capri Casino on Silver Street Friday afternoon in Natchez.

NATCHEZDespite increased gaming revenues since the city’s second casino opened in December, a Mississippi gaming expert says it could take several years for Natchez to see substantial growth to the local gaming market.

Former University of Southern Mississippi professor, researcher and author Dr. Denise Runge said she would, of course, not have expected local gaming revenues to instantaneously double with the opening of a new casino.

“It’s so hard to draw real clear comparisons because (Magnolia Bluffs Casino) opened up on the tail end of a recession going into recovery,” she said.

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Runge, now provost of Oglethorpe University in Atlanta, led extensive research projects on Mississippi casinos several years ago and edited a book on the subject, “Resorting to Casinos: The Mississippi Gambling Industry,” University Press of Mississippi, 2006, under her pre-marriage last name, von Herrmann.

Jay Sowers / The Natchez Democrat — Traffic streams past the Magnolia Bluffs Casino at the bottom of Roth Hill Road in Natchez.

Jay Sowers / The Natchez Democrat — Traffic streams past the Magnolia Bluffs Casino at the bottom of Roth Hill Road in Natchez.

Gaming revenues, Runge said, generally take three to five years to really show the effect of the expansion of the local market, if any has occurred after an additional casino opens.

Typical tourists who travel to a location specifically for gaming are less interested in an area that has one or two smaller properties. Runge said.

“Because if I have a bad night at casino A, I can go to casino B or C and so on,” she said.

That ability for visitors to visit multiple properties in the same vicinity, Runge said, is a significant component of the gaming market. Adding a third or fourth casino, Runge said, would have more of an impact on the market than just adding a second.

“It would certainly help,” she said.

One of the problems Natchez’s gaming market has, Runge said, is the relative ease — or lack thereof — of access to a large airport, which would theoretically attract more out-of-town visitors.

“We thought that might be a problem for Tunica, but it has not turned out to be significant,” she said. “People are willing to drive a little ways, approximately 100-150 miles studies show, (to a property with multiple casinos).”

Overall, Runge said, the incremental increases the Natchez gaming market has seen since Magnolia Bluffs Casino opened are what she would have expected.

According to figures from the City Clerk’s office, December gaming revenue was approximately $2.56 million, up $400,000 from the approximately $2.16 million in December 2011.

January gaming revenue was approximately $3.72 million, up $1.3 million from approximately $2.39 million in January 2012.

February gaming revenue was approximately  $3.22 million, a $350,000 increase from approximately $2.9 million in February 2012.

March revenue was up only approximately $21,000, from $3.72 million to approximately $3.7 million.

April revenues were up $1.23 million from $2.34 million in April 2012 to $3.57 million.

Gaming is an economically sensitive industry, Runge said.

“And if the (economic) recovery becomes increasingly robust, then I think the growth of the market is very likely,” she said.

But if the economy becomes stagnant or dips back down, it would slow down any expansion of the local gaming market.

“As it would with any entertainment industry,” Runge said.

She said any additional expansion in the market may be  years away.

“It’s not clear that we’re going to have a real robust (economic) recovery anytime soon,” she said.

At some point, Runge said, she would expect, or recommend, that Natchez’s two casino work together to market themselves.

“I would expect them to engage in some kind of cross marketing and let people know that there are multiple facilities and that they have options and can stay longer and have a more diverse experience,” Runge said. “That tends to, over time, help make it an overnight destination market.”