Sometimes it seems the journalists take pleasure in giving bad news: gas prices,
inflation, weather, or gloomy event or trend. They tell a story almost gleefully
and in a disassociated manner, telling the rest of us the pain and misery we will
suffer, leaving us feeling that the journalists must live somewhere far away that
is safe from our troubles. I don't subscribe to any disassociation theory; in
fact I have always been annoyed by the righteous tone some journalists take.
However, in the last year, I have tried to cover the same issues more than
once-yes, rather like the annoying journalists, harping on the same subject.
But, having said that, I still feel compelled to make some comments on the economy.
There are some major trends that certainly, if they continue, will have an impact
on the gaming industry. One of the trends is the increasing price of crude oil
and the ensuing increase in the price at the gasoline pump. Gas prices are dramatically
higher than they were last year at this time. (And before I finished writing
this hurricane Katrina hit the gulf coast and the price of oil went over $70
a barrel. There are predictions now of prices reaching $80 or even $100. Hang-on,
this ride is not over.) Wal-Mart, the world's largest retailer blamed gasoline
prices for slowing sales. Gasoline is connected at least indirectly to every
product or service in the economy, and like food it is an essential. That means
as it increases, it takes a larger and larger bit out of the disposable income
of the average casino player.
gained $2.08 on the New York Mercantile Exchange to settle at $65.35
a barrel Friday -- still down 2.6 percent from the record intraday high of
$67.10 reached Aug. 12. The September contracts expire Monday. Gasoline rose
more than 4 cents to settle at $1.9039 a gallon. Edith Balazs, Associated
Press,Indianapolis Star, 8-20-05
The average price in Maryland for a gallon of regular unleaded yesterday
was $2.58, said AAA Mid-Atlantic. That's five cents higher than the day before,
15 cents higher than Friday and 70 cents higher than a year ago. Jamie Smith
Hopkins, Baltimore Sun, 8-17-05
Wal-Mart expects rising gasoline prices to affect its core customer base,
and thus revised its third quarter comp sales forecast
"We believe
high gas prices will continue to impact a large portion of our customer base
and put pressure on our operating results," chief financial officer Tom
Schoewe said. Home Textiles Today, 8-16-05
The price of fuel not only affects the disposable income, it affects the cost
of getting to a casino. But not yet, as AAA Mid-Atlantic reports record levels
of travel. The airlines have only started putting the current fuel prices into
the ticket price, but we can expect more. The price is apparently not the only
worry. In Las Vegas there are concerns that it is possible to run out of jet
fuel; that would definitely have a serious impact on casino revenues.
Lost luggage, bad weather and now ... no fuel? While fliers haven't yet had
to add that problem to the list of headaches associated with air travel, it
may not be far away. Airports in Arizona, California, Florida and Nevada recently
came within a few days -- and at times within hours -- of running out of jet
fuel. Because of supply bottlenecks, airlines were forced to fly in extra
fuel from other markets and scramble for deliveries by truck. But these are
expensive, short-term fixes that do not address what airline executives consider
to be the underlying problem: with passenger traffic rising above pre-9/11
levels, the nation's aviation business is slowly outgrowing the infrastructure
that fuels it
Late July and early August were "unprecedented for
Southwest for the number of cities where we've had to manage supply problems,"
said Glenn Hipp, director of fuel purchasing and inventory management at Dallas-based
Southwest Airlines Co. Brad Foss, Associated Press, Las Vegas Sun, 8-11-05
Trend two is the spiraling prices of real estate. The price of real estate
has matched the pace of gas prices and then some. Lower interest rates and the
excitement of the market conditions have been catalysts to the most dramatic
housing market since the end of the Second World War. The sideline pundits (do
I qualify?) have been saying for at least a year that this is simply a housing
bubble and must one day burst. The opposite opinion holds that real estate never
loses its value and it is always worth its price. There are some other factors:
the higher prices are pushing people to the very edge of their financial capabilities
and creating financing vehicles that will create serious hardships in a few
years. Additionally and from a gaming perspective, bigger mortgages mean high
payments and less disposable income for the local casino. And here from California,
the home of national trends, is a story that suggests the market may be cresting.
In July, the monthly inventory of resale homes for sale in Sacramento, Placer,
El Dorado and Yolo counties combined shot up to 7,263 - the highest for any
month since September 1998. As of Thursday morning, the inventory had risen
another 26 percent to 9,141 homes, reports TrendGraphix, a local data firm
affiliated with Lyon Real Estate of Sacramento
A separate report on sales
activity shows the number of existing homes that were sold in the four-county
region in July fell 11 percent compared with both the previous month and with
July 2004. Andrew LePage, Sacramento Bee, 8-19-05
And finally, one last trend and one undoubtedly related to the other two:
consumer saving has dropped. Worse than dropping, in June it stopped. It seems
that the well of disposable income ran dry, and that leaves us with borrowed
money for our play and fun. Doesn't sound like fun to me.
The personal savings rate is derived by subtracting Americans' total consumption
spending from their total after-tax income (i.e. "disposable income").
By definition, the rest is "saving." In 1984, the personal savings
rate-savings as a share of disposable income-was 10.8 percent. It's drifted
down ever since. It was 4.6 percent in 1995 and 1.8 percent in 2004. It hit
zero in June. Robert J. Samuelson, Newsweek, 8-22-05
There, the doom saying is done; it is as painful to me as to anyone interested
in the industry. It is the source of most of my income, not only from my writing,
but I have casino stocks, an interest in a casino and in slot manufacturing.
If things go bad, I too will pay the price, and I hope as much as anyone that
the federal government is able to enact an energy policy that will do something
about the trend in fuel prices and its impact on the economy.
Regardless of the dark trends elsewhere, the gaming industry is still reporting
good results; the only drop in revenues came from Mississippi (the impact in
June will be dwarfed by Katrina). Every other jurisdiction saw at least minor
gains in revenue.
Nevada casinos also won $954.2 million from gamblers in June - an 11.7 percent
gain over the same month in 2004. Adam Goldman, Associated Press, 8-11-05
Missouri's 11 floating gambling parlors won a state-record $137.3 million
[in July] from gamblers. Rick Alm, Kansas City Star, 8-11-05
Overall, the 12 Atlantic City casinos won $504.8 million from gamblers, a
6.5 percent increase over July 2004
Donald Wittkowski, Press of Atlantic
City, 8-11-05
Iowa July gaming revenue rose 5% to $100.9 million. Alan R. Woinski, Gaming
Industry Weekly Report, 8-15-05
Illinois July gaming win rose 5.5% to $161.3 million. Alan R. Woinski, Gaming
Industry Weekly Report, 8-15-05
Louisiana's state-licensed casinos won $217.7 million [up 8.6%] from gamblers
last month. KATC Channel 3, 8-16-05
Colorado casinos reported more than $69.9 million
up almost 4 percent
from $67.3 million in July 2004. Janet Forgieve, Rocky Mountain News, 8-18-05
Mississippi total [win] for the month was $238.6 million, compared to $248.5
million in July 2004. Biloxi Sun Herald, 8-20-05
Detroit July gaming revenues increased 3.9% to $107.2 million. Alan R. Woinski,
Gaming Industry Weekly Report, 8-22-05
The NBA All-Star game is going to be played in Vegas in '07; the '05 Detroit
version had a $50 million impact on the city; an estimated 45 percent of the
attendees went to a casino. That should work in Vegas. But as Vegas and Oscar
Goodman celebrate the success, the NFL is still stalking Las Vegas in every
place in finds the evil city trying to sneak onto the morally pure and clean
football field.
It's official. The 2007 NBA All-Star game will be played in Las Vegas, making
it the first city without an NBA team franchise to host the event, league
Commissioner David Stern announced Friday. Stern called it "a merger
between the basketball capital of the world and the entertainment capital
of the world." Casinos won't take bets on All-Star events under a ban
proposed by NBA and tourism officials and approved by state gambling regulators.
Associated Press, Las Vegas Sun, 8-5-05
Las Vegas Mayor Oscar Goodman said today's announcement of Las Vegas being
the site of the 2007 National Basketball Association All-Star festivities
is "a giant step" toward Las Vegas getting a major professional
sports franchise. However, Goodman said he would not support a change in laws
or policies that would take every game of a particular sport off the betting
boards of licensed Las Vegas sports books as a condition of getting a pro
sports team. Goodman, at his weekly news conference Thursday, said, however,
he would be willing to support a change that would prohibit betting in legal
books on a Las Vegas-based team. He called that a "reasonable compromise."
Ed Koch, Las Vegas Sun, 8-5-05
The NFL could bar broadcaster NBC from promoting one of its hit shows, 'Las
Vegas', when the network begins carrying Sunday night football next year.
It stems from the league's ban on advertising related to the nation's gambling
capital and NFL spokesman Greg Aiello said the league couldn't rule out extending
the ban to the TV series, reports USA TODAY. David Smith, Sport Business,
8-5-05
If one were to try and find the one event that most shaped the course of gaming
in Nevada (and of course there is not just one, but hundreds), it would be the
Argent Corporation scandal. The mob in Kansas City had found a way to get money
out of Nevada by the wheelbarrow load. Nevada regulators were forced to close
the loopholes that the mob had been exploiting. The elaborate internal controls
that all casinos have to implement and that regulators use to control processes
in casinos have their genesis in that case. It also gave Dennis Gomes's career
a boost upwards; you remember Dennis, he is the guy who figured out the slot
scam as a gaming investigator, and as a general manager in Atlantic City, gave
us the tic-tac-toe playing chickens.
Reputed mafia figure Charles D. Moretina, convicted in 1983 in a casino skimming
investigation that effectively marked the decline of organized crime's influence
in Kansas City, died Sunday. He was 77
Moretina and two other local crime
figures, Carl "Cork" Civella and Carl "Tuffy" DeLuna,
were among 11 men indicted in the scheme, which saw unreported casino cash
shuttled into Kansas City in a courier's luggage
The government argued
in court that the skimmed money was the key sustenance for Kansas City organized
crime. Federal investigators found that participants had skimmed more than
$280,000 from the Tropicana and about $2 million from casinos run by Argent
Corp. Kansas City Star, 8-17-05
And what is Harrah's up to these days? On the move as usual. Rather like commenting
on the price of gasoline, sometimes it seems that Harrah's gets too much attention.
On the other hand, Harrah's strategic moves are very often indicative of trends
that will eventually impact the entire gaming industry. To keep up with Harrah's
almost requires a dedicated daily effort. Harrah's seems always looking beyond
the casino floor to find ways to improve its business and beyond the casino
business to find ways to improve its casinos. Harrah's announced a very good
second quarter; however like the rest of the industry, Harrah's will pay a very
high price for Katrina's visit.
Harrah's Entertainment Inc., which recently completed its $9 billion buyout
of rival Caesar's Entertainment Inc., said Thursday its second-quarter profit
grew 17 percent as gambling increased across its chain of casinos. Net income
rose to $105.8 million
from $90.2 million
Second-quarter results
included 17 days of contributions from Caesars, which was acquired by Harrah's
on June 13, allowing the company to maintain its position as the world's largest
gambling company in terms of revenue. Quarterly revenue totaled $1.47 billion,
up 42 percent from $1.04 billion a year earlier and beating analysts' consensus
target of $1.42 billion. Caesar's casinos added $181.8 million in revenue.
Adam Goldman, Associated Press, Yahoo! Finance, 8-4-05
Harrah's is certainly trying to become a major player in racinos. It may not
be the market leader, but whenever there is an opportunity, expect Harrah's
to be standing in the queue.
GTECH Corporation has sold its one-third interest in Turfway Park to the
track's remaining partners, Harrah's Entertainment and the Keeneland Association,
the Florence, Kentucky, track announced Tuesday
Built in 1959 as Latonia,
a nod to the original Latonia that operated from 1883 to 1939 about 10 miles
north of the present site, the track was sold and renamed Turfway Park in
1986. GTECH, Harrah's Entertainment, and the Keeneland Association purchased
Turfway Park in partnership in 1999. Blood Horse News, 8-2-05
Mayor Street's Gaming Advisory Task Force has considered 11 sites for two
slot machine parlors and has ruled out three possible scenarios for where
they should go. A report being released today says the city could not handle
the traffic if both slot parlors were built either at the Navy Yard or on
East Market Street, or if one was on Market Street and the other was at Penn's
Landing. The most profitable scenario, the report says, would be to split
the locations, with one on the Delaware River waterfront and the other near
the intersection of the Schuylkill Expressway and Roosevelt Boulevard...That
should come as welcome news for Harrah's
Harrah's owns a waterfront plot
on South Christopher Columbus Boulevard. Ameristar has an option on a waterfront
plot in Fishtown. Chris Brennan, Philadelphia Daily News, 8-15-05
For decades in this faded shipbuilding city [Chester, Pennsylvania], it seemed
that prosperity only knew the way out of town. The manufacturing jobs that
were plentiful in the 1950s are mostly gone, the victims of technology and
cheaper foreign labor
But city officials hope to restore Chester's most
impressive asset - three miles of frontage on the Delaware River - to prominence
with the help of something as simple as highway ramps connecting I-95 to the
city's main riverfront thoroughfare, nicknamed "the industrial highway."
Currently,
Chester's waterfront is bookended by the seeds of revival. At one end, in
the shadow of the Commodore Barry Bridge, is the city's new Barry Bridge Park
and boat launch and a former, neoclassical coal-fired plant that has been
restored as modern office space. At the other end is construction on what
will be Harrah's Chester Casino and Racetrack, set to open next year. Marc
Levy, Associated Press, Philadelphia Daily News, 8-8-05
Indian gaming is, of course, another area in which Harrah's has been successful
and continues to work to gain new opportunities. Indian country is one place
that previous successes really help gain access to new opportunities, and Harrah's
experience and reputation with tribes in Arizona, California and North Carolina
help in getting new contracts.
Former Gov. Don Siegelman said Friday that if he were Alabama's next governor,
he would try to negotiate a compact with the Poarch Creek Indians that would
allow them to operate full-fledged casinos, provided they paid substantial
money to the state
The governor said he doesn't like casino gambling,
but he expects the Poarch Creek Indians' gambling halls in Atmore, Montgomery
and Wetumpka to keep growing because the tribe is working with Harrah's. Phillip
Rawls, Associated Press, Las Vegas Sun, 8-8-05
Supporters of a proposed Narragansett Indian casino told Rhode Island's high
court on Monday that the state would have operational control of the gaming
site.
The House of Representatives asked the high court for an advisory
opinion on the constitutionality of the casino proposed by Las Vegas-based
Harrah's Entertainment and the Narragansett Indian Tribe. The justices did
not indicate when they would rule on the request. Ed Tucker, Associated Press,
Las Vegas Sun, 8-16-05
An environmental study is under way for the planned $250 million Harrah's
casino in the Fresno County foothills, and if all goes as planned, ground
could be broken by early 2007, a tribal official said Tuesday.
The 1.3
million-square-foot casino will include 2,000 slot machines, 40 table games,
a 221-room resort hotel, a 2,500-person outdoor amphitheater and retail shops,
according to the latest plans. E.J. Schultz, Fresno Bee, 8-19-05
The biggest story of the month for Harrah's may be in Vegas. Quietly Harrah's
has bought some addition property on the Strip that may lead to one of the mega
casino complexes like the one MGM Mirage is building, or the one George Clooney
is said to be involved in creating. At this point Harrah's has as large a piece
of the Strip as anyone, a seemingly blank slate on which to write the Harrah's
name.
After years of struggling to compete with the ever-growing roster of Las Vegas
mega-resorts, the 166-room Bourbon Street hotel-casino will finally close
Harrah's
Entertainment, which purchased Bourbon Street last March for $61 million, says
it will close the property by Oct. 31. Harrah's has also purchased land across
from Bourbon Street. Anthony Curtis, Las Vegas Advisor, 8-7-05
Harrah's Entertainment Inc. has signed an agreement to purchase the Imperial
Palace for $370 million, giving the company a larger foothold on the Strip
and ownership of four adjacent casinos
Imperial Palace is located between
Harrah's Las Vegas and the O'Shea's and Flamingo casinos, both of which Harrah's
acquired from Caesars. Also this year, Harrah's acquired the Bourbon Street,
a small hotel and casino on eight acres behind the Flamingo, as well as a
few acres adjacent to the property. Across Flamingo Road from its Flamingo
resort, Harrah's expects to redevelop and rebrand its Bally's Las Vegas property.
Liz Benston, Las Vegas Sun, 8-23-05
At 5 a.m. this morning, the last of those walls came down as Harrah's Entertainment
Inc. opened the Palace's 949-room Augustus hotel tower at the corner of Flamingo
Road and Las Vegas Boulevard
The $289 million tower gives Caesars about
40 percent more rooms
Liz Benston, Las Vegas Sun, 8-12-05
The integration of the acquired properties and databases is a challenge and
will take a long time. It is said that the Horseshoe database has been absorbed,
but whether the management teams and strategies have been internalized is another
issue altogether. It is particularly important in the case of the Horseshoe
brand, because Harrah's wants to extend the brand and replace some of its properties
with the Horseshoe name. That suggests that it is necessary to understand the
brand and the Binion strategies. With that process in motion it is now time
to try and do the same with arguably the most recognized brand in the industry:
Caesars. There will be name changes and rebranding of some former Caesars properties;
some like Ballys will probably be something much different than its former identity.
And it will take at least another year to fully integrate the Caesar's database,
but then 40 million names may be worth the wait. As that process continues,
so does the process of associating the Harrah's brand with other national brands
in a way that no other casino company has even approximated. And don't forget
Singapore; Harrah's is on the list of potential operators waiting for one of
the two licenses to build a property: sounds like a job for the Caesars brand
to me.
Harrah's $9.4 billion dollar buyout of Caesars Entertainment was finalized
in June this year but the work of tying the two companies' databases together
will cost $130 million. It will take another year before Harrah's finally
integrates Caesars' 15 million Connection Card members into its own list of
25 million Total Rewards members to create a database of 40 million customers
"The
value is immeasurable," Internet Marketer Jay Schwartz said. "It's
probably more valuable than the properties themselves. It's massive. It's
one of (every) seven Americans." Steven Mihailovich, Business Press,
8-15-05
With its recent acquisitions of Caesars Entertainment and Horseshoe Gaming
complete, casino behemoth Harrah's Entertainment (NYSE: HET) is expected to
move forward predominantly with three brands: Harrah's for retail, the Horseshoe
for high-end local casinos, and Caesars for premium resorts
Harrah's
announced that it would rebrand the newly acquired Caesars Indiana property
in Elizabeth, Ind
using
Horseshoe brand. Caesars' Grand Casino Biloxi
along the Mississippi Gulf Coast will get the same treatment, making the two
casinos the fifth and sixth Horseshoe-branded properties under Harrah's control.
Jeff Hwayng, Motley Fool, 8-19-05
Singapore will modify some rules for the city-state's first casino-resorts
after consulting bidders including Harrah's Entertainment Inc. and Las Vegas
Sands Corp. In June the city-state delayed to the third quarter from the second
releasing its request for proposals, which would spell out guidelines for
its casino-resorts for the dozen bidders, which include Kerzner International
Ltd. and Genting Bhd. Gambling Magazine, 8-16-05
It almost seems unfair. Whatever Harrah's wants it seems to get, well at least
until August 29th when Hurricane Katrina visited the Gulf Coast. Harrah's just
hired a good old boy to shake hands and declared its intent to add more rooms
in New Orleans; and then along came Katrina. Even the industry's largest company
is helpless in the wake of the storm. In fact, Harrah's is as weak and helpless
now as the thousands of other homeless people whose homes were destroyed.
Former NFL quarterback and current Shreveport resident Billy Joe Tolliver
has joined the staff of Horseshoe Casino and Hotel and Harrah's Louisiana
Downs to work in player development. Tolliver joins the company as an executive
casino host focusing on developing high-end players as well as hosting a variety
of golf tournaments. Tolliver attended Texas Tech, where he held every single-game
and nearly all career passing records, including yardage and touchdowns in
a single game. In his 11-year NFL career, Tolliver played for the San Diego
Chargers, Atlanta Falcons, Houston Oilers, New Orleans Saints and Chicago
Bears. Cristina Rodriguez, Shreveport Times, 8-16-05
Harrah's Entertainment Inc., which won a concession from the Legislature
in 2001 to own and operate a 450-room hotel at its downtown New Orleans casino,
now says that's not enough to accommodate its visitors.
Harrah's has
told the Greater New Orleans Hotel and Lodging Association that it wants to
lift or lighten the restrictions on the number of hotel rooms it can operate.
Channel 6 WDSU, 8-19-05
There is good management and bad management; the judgments are usually subjective
and based on personal experience with a company or specific individuals. Sometimes
the results in public companies can be used to measure management skill; rarely
does one get a court opinion to support an opinion. In a case in court in California
the federal government was judged to be a bad manager, to the tune of $93.6
million. The arbitration panel ruled the government's management of a California
card room had reduced the value of the casino from $150 million to $16.5 in
just six years. Gives new meaning to government ineptness, doesn't it?
George Hardie, ex-manager of the Bicycle Club, may land most of a $93.6 million
settlement...Legal proceedings over the U.S. government's six-year attempt
to operate an infamous Los Angeles-area card room in the 1990s, could land
a Las Vegas businessman the bulk of a $93.6 million arbitration award, court
documents show
.U.S. Department of Justice seized a 45 percent ownership
and management status in the Bicycle Club in 1993 as a result of forfeiture
proceedings that involved one of the club's original owners. The government
then tried to operate the gambling parlor, which had been billed as the state's
largest card room, but met with little success, eventually selling its stake
in 1999...ruled
in favor of Hardie and his partners, awarding a $93.6
million figure based on what should have been the value of their ownership,
six years of lost profits and various additional damages. The Bicycle Club,
the arbitration panel found, suffered severe and steady declines in gross
revenues and profits during the government's stewardship, reducing a business
that was worth $150 million to a value of about $16.5 million six years later.
Howard Stutz, Gaming Wire, Las Vegas Review-Journal, 8-19-05
And on the subject of government management, a small update on Pennsylvania.
When the law enabling slot machines first passed in Pennsylvania, the slots
seemed to be nearly on the trucks, ready to deliver and install and for all
of the people who have to travel all the way to Atlantic City, ready to play.
A year later that delivery seems no closer, in fact with the realities of the
layers of regulation and political battles over privileges and locations, those
slot machines may be farther away than they were last year. The gaming commission
is just about formed, but most communities have formed their own review process
for locations and no investigations have begun, much less licenses issued. And
the local battles have heated up, with the battle for Gettysburg serving as
the perfect metaphor.
Gettysburg is essential to our national identity
the epic three-day Battle
of Gettysburg, with 51,000 dead and wounded soldiers, determined that we would,
indeed, be "one nation," free of slavery. After the smoke cleared
on July 4, 1863, 2,400 shocked townspeople buried the dead and cared for 21,000
wounded soldiers from both sides. In his Gettysburg Address, President Lincoln
said the world "can never forget" what the soldiers did in securing
a "new birth of freedom." Now, the two million heritage tourists who
arrive here yearly may soon pass by the proposed Gettysburg Gaming Resort and
Spa
is proposing a 200-room hotel, spa and gambling parlor that would
start with 3,000 slot machines and aim to expand to 5,000
. No Casino Gettysburg
conducted a survey of 300 visitors over the crowded July 4, 2005, weekend and
found that 96 percent opposed the casino, and 53 percent said they would not
return if one were built. Susan Star Paddock, Philadelphia Daily News, 7-26-05
The Rooney family, owners of Yonkers Raceway and the Pittsburgh Steelers,
may have welcomed video lottery machines at their harness track with open
arms, but it is a different story in Pittsburgh. In that city, the Rooneys
are trying to block a video slots parlor from moving onto a lot near Heinz
Field, where the National Football League team plays. Yonkers residents who
protested having a "racino" in their backyard now are calling the
situation a double standard
At Yonkers Raceway, the Rooneys plan to unveil
5,500 video lottery terminals in September 2006. A $185 million renovation
and expansion is under way to update the century-old track and to make room
for the new gambling operations. Hannan Adely, Westchester Journal News, 8-23-05
Bethlehem City Councilman Gordon Mowrer's status as a Moravian minister grabs
more attention these days as he leads a fight to keep slot machines out of
the city. The Moravians, whose ancestors settled here in 1741, oppose gambling
on moral grounds and two months ago launched a public campaign against a $300
million slots parlor proposed for the former Bethlehem Steel plant
Mayor
John Callahan describes the slots parlor as the vehicle that can jump-start
the Steel site's redevelopment and preserve historic industrial buildings
The
Sands, considered a front-runner for one of the state's two available licenses
for free-standing slots parlors, started its public relations campaign during
Musikfest, sponsoring a promotional tent and going public with a plan to light
up the iconic Steel blast furnaces as a symbol of the Sands' commitment to
redevelop the South Side. Nicole Radzievich, Morning Call, 8-23-05
It would be impossible to sum up the month of August at this point; in the
last few days of the month an event took place that will have major implications
for the entire economy. A hurricane hit the Gulf Coast and the damage is dramatic.
Casinos like most businesses are closed, employees evacuated, and no one knows
quite when life will return to normal. Last year's hurricanes caused Mississippi
to rethink the idea of riverboat casinos in general; this storm should cause
every jurisdiction to reexamine the concept; it is dangerous, too dangerous.
And it also illustrates how frail an economy can be; Biloxi, for example, is
the poster child for casino successes; Biloxi went from one of the poorest counties
in the country to a very healthy and profitable economy. New construction had
popped-up all around, the new Hard Rock and many remodels. The Hard Rock now
has to be rebuilt and is probably a year rather than a day from opening. The
lesson is clear for the legislators--when your economy is built on such a frail
premise, do everything you can to protect it from destruction. Destruction may
be too strong a word to use in a month or a year when we know all of the effects
of this story, but it is not too strong a word for the last day of August 2005.
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