Megaresorts may be thing of the past in Mississippi

By Jack Elliot Jr./The Associated Press

JACKSON — Economists and casino watchers don’t expect any more billion-dollar resorts to open in Mississippi.

A case in point is Jimmy Buffett’s Margaritaville Casino. It started out as a $700 million resort but it was reduced to a smaller and more casual $48 million development — similar to the mom-and-pop gambling houses off the strip in Las Vegas.

“The trend in Mississippi … we’re not going to see the billion-dollar investment. Those are not going to come to Mississippi right now, not in this economy,” said economist Scott King, director of research and policy for the Gulf Coast Business Council.

Allen Godfrey, executive director of the Mississippi Gaming Commission, said Margaritaville is not the same project as envisioned by Harrah’s Entertainment in 2007 when it was to be built on the beach in Biloxi.

The new owners, MVB Holdings, pared the project and moved it to the Back Bay of Biloxi.

Godfrey said the scaled back Margaritaville is a sign “of where we are.”

“We are not going to reduce our standards for casinos and start letting slot parlors come in here. There is an expectation that comes with every project,” Godfrey said.

He said the Gaming Commission has been seeing casino proposals in the $150 million to $250 million range, rather than megaresorts at more than triple the cost.

“It’s tough to finance that kind of money,” Godfrey said of the huge projects.

King said there may be some proposals floating around for megaresorts but “those people are going see that finding financing is going to be a lot more challenging.”

Mississippi’s casinos have had their share of setbacks. Hurricane Katrina in 2005 devastated the industry on the Gulf Coast. More recently, business took a hit in the spring as Mississippi River flooding forced the lengthy closure of riverside casinos.

And the casino business nationwide has been struggling to recover from the Great Recession, which slashed discretionary spending and business travel and was followed early in 2011 by high gasoline prices. Recently, some economists have been warning about the possibility of another recession amid a snail’s pace growth in jobs.

There’s more competition for the gambling dollar with the growth of casinos across the country, and closer to home in states such as Louisiana, Florida, Missouri and Oklahoma.

Mississippi’s state-licensed casinos recorded a 9 percent drop in August gambling winnings from a year ago.

The 19 casinos along the Mississippi River took in $94 million from players in August, down $6.5 million from August 2010. The 11 casinos along the Gulf Coast won $90.9 million, down from $101 million a year ago.

Overall, casino winnings totaled $185.1 million, down from $201.7 million a year ago. For July, typically a busier month for the business, winnings totaled $210.6 million.

A new report presented by the Mississippi Casino Operators Association suggests casino operators must continue to innovate their gambling products and improve non-gambling resort offerings.

Webster Franklin, president/CEO of the Tunica Conventions and Visitors Bureau, said while everyone hopes the economy will turn around, the casino and tourism industries are “not a necessity but a choice and people are now choosing to spend much less on leisure entertainment options like visiting a casino.”

Franklin said tourism planners along the Mississippi River and the Gulf Coast need to market more than just casinos.

“What has hit home is that Tunica County in particular is its infancy as a tourist destination,” Franklin said. “We had one stoplight and no four-lane roads in 1994. As much growth as we have had since the first casino opened here in 1992, we still don’t have a massive amount of attractions that most places like a Branson, Mo., or Biloxi, Miss.

“We need to find ways to bring in things like a water park, more family-oriented things that are not found here. We need to evolve … use our history and culture to bring people here that have not come here before,” he said.

Franklin said Tunica in the late 1990s took steps to enhance and complement the casino industry — new roads, a tennis complex, a river park, airport and road improvements and factory outlet shops. He said now something more is needed.

“We need to expend some dollars on things that will keep people here a little longer. That’s what we would have been doing if the flood hadn’t put a big monkey wrench in our plans,” he said.

King said the coast faces the same challenges.

“Our gaming product is still superior,” he said. “The challenge for Mississippi is to continue to partner with nongaming stakeholders to extend people’s stays and attract people from out of state.”