Mississippi Casino Revenues Dip

17 August 2006

By Howard Stutz

MISSISSIPPI -- With seven hurricane-destroyed casinos still on the sidelines, revenues produced by Mississippi's gaming industry took another year-over-year dip in July, according to figures released Wednesday by the state's gaming regulators.

But clearing skies are on the horizon.

With only five casinos open during the month from what had been a 12-casino coastal gaming market, Mississippi gaming revenues were $222.7 million in July, a 6.3 percent drop compared with $237.6 million in July 2005.

The five casinos in Biloxi contributed $74.7 million in gaming revenues. Last year the 12 operating casino brought in $101.7 million in gaming revenues during July.

Mississippi's river county casinos, which includes properties in Tunica and Vicksburg, reported collective gaming revenues of $148.3 million, a 9.1 percent increase compared with $135.9 million a year ago.

The Mississippi Gaming Commission does not break out individual casino totals.

Gaming analysts said the gaming revenue total has been remarkable, given the devastation Hurricane Katrina brought to the Mississippi communities of Gulfport, Biloxi and Bay St. Louis almost a year ago. The powerful storm destroyed or heavily damaged 12 casinos and a 13th that had been scheduled to open shortly after the Aug. 29 disaster.

The Imperial Palace, Isle of Capri, and Palace Casino, all in Biloxi, reopened in December. The Treasure Bay and Boomtown, also in Biloxi, recently reopened with small, temporary facilities.

"The Gulf Coast results remain impressive considering the constrained capacity in the Biloxi and Gulfport markets," Bear Stearns gaming analyst Joe Greff said in a note to investors Wednesday. "Revenues have grown sequentially since April, due, in part, to additional capacity from 500 slots added at Isle of Capri in late May and the opening of Treasure Bay and Boomtown at the end of June."

Greff said the river county casinos, which include properties owned by Boyd Gaming Corp. and Harrah's Entertainment, have benefited from the lost business on the Gulf Coast, which will change in the coming months.

Las Vegas-based Harrah's is reopening the Grand Casino Biloxi today as a temporary land-based facility with 800 slot machines and 28 table games, as well as a 500-room hotel, a buffet and other amenities.

Harrah's recent purchased the closed Casino Magic site from Pinnacle Entertainment, which is next door to the Grand Casino, and is master-planning the location for a large resort complex.

The Biloxi community will become even healthier on the first anniversary of the hurricane when MGM Mirage reopens the Beau Rivage, the state's largest casino. The company said it made many improvements including a new casino layout and remodeled rooms and suites. MGM Mirage said the hotel-casino, which includes convention space, will employ 3,800 Mississippi residents.

Also, a golf course designed by Shadow Creek designer Tom Fazio and operated by Beau Rivage, is scheduled to open in November.

The Casino Magic in Bay St. Louis, owned by Penn National Gaming, is expected to reopen shortly as the Hollywood Casino.