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Howard Stutz

Biloxi Mayor Says Casinos Will Again Revitalize Region

12 May 2006

BILOXI, Mississippi -- Mayor A.J. Holloway watched during his first 12 years in office as a booming Gulf Coast casino industry fueled his city's economic prosperity.

Holloway told the opening session of the Global Gaming Exposition Institute on Wednesday at Red Rock Resort that casinos will once again serve as the catalyst to revitalize the small community ravaged by Hurricane Katrina last year.

"We're going to look at the things that made us successful in the past," said Holloway, who had just started his fourth four-year term as Biloxi's mayor when Hurricane Katrina hit the community Aug. 29. "We're going to build on those qualities to help make us even more successful in the future."

Before Hurricane Katrina, Biloxi's 10 casinos produced $911 million in gaming revenue in 2004, providing taxes that enhanced the city's budget. The estimated 30-foot storm surge and 130 mph winds dismantled the city's gaming industry, which had helped make Mississippi the third-most prosperous casino state in the nation behind Nevada and New Jersey.

In December, three Biloxi casinos reopened. Several gaming companies, including Harrah's Entertainment and MGM Mirage, have said they will reopen their Biloxi casinos this summer. Other casino operators have hinted at opening rebuilt casinos by the end of the year.

"There's a difference in actually reopening and saying you're going to reopen," said Isle of Capri Casinos President Tim Hinkley. His company's Biloxi property reopened in December with a temporary casino located in the hotel's convention space. An expansion expected to be completed next week will give the property 1,300 slot machines and gaming tables.

Hinkley participated in a panel discussion with Holloway on reviving the Gulf Cost gaming market.

"I think everything we've heard gives us confidence that Biloxi will come back," Hinkley said.

Mississippi gaming revenue statistics show the three reopened casinos had gaming revenue of $64.2 million in January, $58.8 million February and $63.7 million in March, about 70 percent of what 10 casinos earned in the prior year.

Revised Mississippi gaming regulations that allow casinos to be located 800 feet from the Gulf of Mexico shoreline has Holloway predicting that between 15 and 20 casinos will dot the Mississippi coastline by 2010.

He said the rebuilding of the Highway 90 bridge that connects the Biloxi peninsula with Ocean Springs, Miss., to the east, will help bring back the tourists. The new bridge could be open in 15 months after the construction contract is awarded in June.

Still, Holloway said visitors are finding their way into the casino district. He said his own personal survey of the license plates in casino parking lots show vehicles from Arkansas, Alabama, Georgia, Florida, Tennessee and other areas of Mississippi.

"Conventional wisdom was that our casino customers would be construction workers and FEMA employees," Holloway said. "But our visitors are starting to come back."

Before the hurricane, Biloxi had $6 billion in development during Holloway's first three terms. The casinos hired 15,000 employees while the number of hotel rooms on the Gulf Coast grew from 6,000 rooms to 20,000 rooms.

"We went from 1 million visitors a year to between 8 million and 10 million a year," Holloway said. "When Beau Rivage opened in 1999, we saw gaming revenue jump to $775 million, which was a 35 percent increase over the previous year. In 2004, the casinos in Biloxi grossed $911 million. That's an 18 percent increase in the five years since the Beau opened."

Hinkley said Biloxi's biggest needs are affordable housing and infrastructure. He said jobs are becoming available; Isle of Capri has hired more than 1,000 workers since reopening.

"We need to provide those employees a place to live," Hinkley said.

The hurricane wiped out 6,000 homes and businesses in Biloxi and several historical homes and landmarks along Highway 90, which runs alongside the coastline.

Holloway said land values have doubled and tripled in Biloxi, especially in the hurricane-devastated community of Point Cadet at the peninsula's eastern tip. Almost all the older residences in the area that borders the casino district were destroyed. Holloway said he expects that area to become a commercial zone that enhances the returning casino industry.