Coast casino revenue cooling, but still poised to surpass $1 billion

Wednesday, June 21, 2000 | 12:14 p.m.

Gross gambling revenues are up about 12 percent for the first five months of the year to $470 million.

In April and May - the only months in which Beau Rivage is included in results for 1999 and 2000 - revenues were flat.

"It's slow, steady growth, but so what? It's growth," said Keith Crosby, president of the Gulf Coast Gaming Association and general manager of the Palace Casino Resort in Biloxi.

Market capacity will increase this month because of the late-May opening of Palace's 236-room hotel and the early-June expansion of jet service at Gulfport-Biloxi Regional Airport.

A fourth daily Northwest Airlines flight out of Memphis and a third daily AirTran flight out of Atlanta have given the airport an increase of 175 inbound seats per day.

"Air service is a strong catalyst for bringing in more gaming," said analyst Marc Falcone of Bear Stearns.

Gross gambling revenues for June - to be released a month from now - will give analysts a better indication of a trend.

Those figures will provide data from three months that include Beau Rivage year-to-year.

"A healthy Beau Rivage in a healthy Gulf Coast market can only mean good things for all the other operators," said analyst Dan Davila of Hibernia Southcoast Capital, "because one successful property feeds off another."

While Beau Rivage has led an expansion of the Coast gambling market, the growth has been offset by the increased costs of competition.

"Profit margins are lower than last year," Falcone said. "The companies we talk to say it's a challenging operating environment right now. It has become a very competitive market in terms of fighting for the gamer."