Will MS Casinos Rebuild on Land?

From Clarion-Ledger
By Nell Luter Floyd
September 27, 2005

State lawmakers begin meeting today to finally answer that question

Not even the gaming industry can agree about exactly where Mississippi Gulf Coast casinos damaged by Hurricane Katrina should be allowed to rebuild, the chairman of the House Gaming Committee said Monday.

"They have varying opinions on this based on where they are located and where the competition is," said Bobby Moak, D-Bogue Chitto, chairman of the Gaming Committee.

Some gaming companies don't want to move an inch from where they are, while others suggest re-building on land at distances varying from 800 feet to 2,000 feet from the shoreline.

The Legislature is set to convene today in a special session focused on rebuilding the Gulf Coast. Allowing gaming companies to move casinos onto land rather than back on floating barges will be considered.

State law says casinos can be built only over the waters of the Mississippi River or the Gulf of Mexico. Most of the 13 Gulf Coast casinos were severely damaged when Katrina blew ashore Aug. 29.

Bernie Burkholder, chief executive officer and chairman of Treasure Bay Casino in Biloxi, said he expects the majority of Gulf Coast casinos will agree to a move on land 800 feet from their mean high tide mark. "The minimum feet needs to be enough to take care of every casino," he said, and 800 feet would do that.

Harrison County, Hancock County, the city of Biloxi and Mississippians for Jobs support a move inland 800 feet, he said. Harrison County supervisors passed a resolution asking lawmakers to let Coast casinos move up to 1,500 feet inland from their current locations.

Harrah's Entertainment, which operates Grand Casino-Gulfport and Grand Casino-Biloxi, is asking for shore-based casino resorts up to 2,000 feet from the current locations on land adjacent to where the barges previously existed.

"What we're trying to show is everybody has misconstrued inland gaming as if we're looking for a major expansion of gaming in Mississippi," said Jan Jones, senior vice president of government relations and communications for Harrah's. "What we're looking for is to replace the existing property and lost jobs on a stable foundation."

The two Grand Casinos could possibly reopen in 14-18 months if the Legislature acts quickly, Jones said. The two casinos employ almost 4,000 people.

She said if the Legislature fails to OK a move off water, the company would have to study whether to build back. "The Grand Casino-Gulfport barge was two football fields end-to-end, and Katrina picked it up like it was a ping pong ball and threw it across the highway," she said.

Beau Rivage, Isle of Capri and Casino Magic have so much infrastructure already built that it's gong to be difficult to separate those casinos, Burkholder said.

"I believe they will not actively oppose it (the 800-foot move) but will not be supportive," he said.

The Mississippi Economic Council Board of Directors favors "allowing construction of Gulf Coast casinos on dry land, but within close proximity of the shoreline."

The Gulf Coast casinos, including Hard Rock, which was scheduled to open Sept. 1, employed 16,000 people. The 12 casinos operating when Katrina hit contributed $500,000 a day in state gaming tax revenue.

Not only are employees out of work while they're shut down, but vendors who supply casinos also are affected, Moak said.

Treasure Bay sustained more than $100 million in damage and doesn't have insurance to cover all its losses, Burkholder said. The casino barge wasn't insured, but its land-based structures were insured, he said.

"If I'm forced to rebuild over water, we'll take our insurance money and look for opportunities elsewhere," he said. "My company would like to re-build in Biloxi a safe distance north of the water across Highway 90."

He said if the Legislature OKs the move, he expects to put half the casino's 1,000 employees back to work in the next six months.

Moak said he hopes taxation of the gaming industry and payment of tidelands leases don't become an issue during the session. "I think the issue should be clean," he said.

Gov. Haley Barbour is calling for casinos to be allowed to build 1,500 feet from the water. He also calls for structures not located in tidelands to pay the state an amount equal to a comparable tideland area.

Jones said Mississippi has the ability to make the Coast a complete resort destination.

She said gaming companies would consider expanding non-gaming space such as restaurants and meeting space if Coast casinos are allowed to move onto land. Casinos on the Las Vegas strip derive over 65 percent of revenue from nongaming, she said.