Mississippi casino study, tax analysis expected this summer

Monday, May 22, 2000 | 12:03 p.m.

University of Southern Mississippi researchers are in the last weeks of a year-long, $200,000 study of the state's casino industry. The study, funded by state lawmakers last year, is expected to show the effect of higher taxes on casinos and ways to keep tourists in Mississippi longer.

For the past 10 months, state revenues have been $38 million behind expectations. Some lawmakers are anxious to find money to fund a teacher pay raise approved this spring.

"Every year, somebody is introducing a bill that's going to increase our taxes," said Bruce Nourse, director of external affairs at Beau Rivage casino resort in Biloxi. "With the teacher pay raise such a high-profile issue, there's going to be a lot of pressure to generate growth."

Nourse said raising taxes "could have a negative effect, primarily on Wall Street."

"The cost of capital may be increased. Also, we have some marginal properties in the state that are squeezing by. Raising taxes might be the straw that breaks the camel's back," he said.

Robert Ingram, USM's executive director of economic development and coordinator of the study, called it "a marketing analysis to determine how Mississippi can get more benefit from visitors coming in for gaming."

Among other things, he said, the study will determine who comes to the state to gamble, why they choose Mississippi, where they spend their money and what kinds of amenities would make them stay longer.

Ingram said he and about 20 other people involved in the study talked with and analyzed data from tourists, residents, businessmen and casino executives.

So far, he said, they have found that visitors stay an average 1.7 days and spend about 70 percent of their money on gambling-related expenses. In Las Vegas, he said, visitors stay an average four days and spend 50 percent of their money on gambling.

The study also looks at what could happen if legislators raise gambling taxes, which are now 8 percent for the state and 4 percent for cities and counties with casinos. Those taxes raised $281 million in the last fiscal year.

When teacher pay raises were discussed, several lawmakers proposed raising gaming taxes to fund them. The six-year plan is designed to bring salaries up to the Southeastern average. Raises are only guaranteed in good financial years.

"I hope the growth is there to trigger the pay raise and leave the status quo," Nourse said. "Someone needs to study the impact to educate the legislators so they have a good understanding what an increase may do to the industry and the employees."