Casino incentives now law

Published 12:40 am Wednesday, March 18, 2009

JACKSON (AP) — Mississippi has given casino developers another reason to invest in the state once the national economy rebounds — a 30 percent sales tax rebate.

The tax break would be given to developers who build golf courses, hotels, convention facilities and other non-gambling attractions.

Gov. Haley Barbour, who signed the bill into law Tuesday, said the proposal isn’t that big of a gamble for the state. Barbour said Mississippi is simply ready to give back a portion of the taxes it might otherwise never reap if new projects aren’t attracted via such incentives.

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Casino companies were previously the only businesses excluded from the tax incentive program.

They’ll be eligible for the tax incentive for investment of at least $10 million for indoor or outdoor entertainment centers, museums, golf courses, spas, pro sports facilities, marinas, motor speedways and other attractions. The minimum investment for a hotel project is $40 million.

‘‘I’m confident it will create new jobs and generate enormous investment in the state in coming years,’’ Barbour said, adding that the change will bolster the state’s tourism sector, which generated about $436 million in tax revenue last year.

But it could be a while before casino developers are in a position to build multimillion dollar projects.

The national recession is leaving its imprint on the industry as many casinos across the country and in Mississippi are laying off workers.

‘‘The financing environment is difficult right now for new projects,’’ said Jacob Oberman, a Las Vegas gaming analyst.

Oberman said major casino companies have a lot of debt, and are unable to make interest payments. To cut costs, casinos are cutting jobs, he said, adding that Las Vegas’ industry layoffs are at 10 percent.

‘‘Mississippi hasn’t been affected as greatly as places like Las Vegas because we’re much more dependent on tourists coming from further away,’’ Oberman said.

Mississippi has 30 operating casinos and the state’s gaming markets rank among the top 10 in annual revenue nationally.

The state’s casino employment was down 11.5 percent in December 2008 compared with the previous year, according to the state Gaming Commission.

‘‘The passage of this legislation couldn’t have come at a better time,’’ said Webster Franklin, president of the Tunica County Convention and Visitors Bureau. ‘‘Mississippi can begin to differentiate itself from our competitor states likes Arkansas, Louisiana, Illinois, Indiana and Missouri.’’

Transforming the Mississippi Gulf Coast into a top tier destination will require adding more tourism amenities, said Duncan McKenzie, president and general manager of the Hard Rock Hotel and Casino Biloxi.

McKenzie said Mississippi has improved its chances for future investments because companies are ‘‘going to invest their money where they’ll get the most return.’’