Casino revenue in Miss. remains steady

Jack Elliott Jr

Tuesday, Feb. 1, 2005 | 9:18 a.m.

JACKSON, Miss. -- There's been nothing spectacular about the single-digit growth in Mississippi's casino industry over past five years.

But nothing will compare to a year like 1994 when 11 casinos opened in one year.

Regulators and industry insiders believe gaming operators in Mississippi are continuing on a long and profitable run that began when the first gambling house opened in 1992.

Larry Gregory, executive director of the Mississippi Gaming Commission, said the casino business is poised to make a jump with two casinos to open on the Gulf Coast this year and as many as eight others in the wings.

The Hard Rock Hotel and Casino is to open in August; the Silver Slipper Gambling Hall and Saloon in November. The openings will bring the number of casinos on the coast to 14 and statewide to 31.

"As far as the next year, we are looking at single digit increases (in revenue)," Gregory said. "Of course, most of that is contingent on the economy and fuel prices or whatever, but I think it is going to grow a little bit because we've got so much on our plate right now."

For the 2004 calendar year, state Tax Commission figures showed casino revenue were $2.7 billion, behind only Nevada (an estimated $10.255 billion) and New Jersey ($4.8 billion).

The 2004 figure was up from $2.6 billion in 2003, about a 3 percent increase.

"We have stayed steady in maintaining our third in the nation place regarding gross casino revenue," Gregory said. "You would expect the small, single-digit (growth) since we've not had a new opening since 1999 when the Beau Rivage opened.

Gregory said even with the slow increase in revenue: "I don't think you would have 10 companies wanting to invest in Mississippi if we looked like we were going down as a gaming jurisdiction."

Gross revenue is casino revenue only -- separate from hotel, restaurant or bar revenue generated by the resorts.

Gregory said Gaming Commission figures show that in the last year casinos had $264 million in revenue from hotels, $318 million from food and $116 million from beverages.

The revenue growth, even if less than the boom of the 1990s when the industry in Mississippi was launched, is not to be discounted, said Frank J. Fahrenkopf Jr., president and CEO of the American Gaming Association, the industry's advocacy group.

"In the 1990s, when you had the casinos opening and it was clear there was pent up consumer demand, you had (revenue) numbers that were off the chart," Fahrenkopf said. "Then you went into a period with pretty solid growth, a couple of years at 5 to 6 percent and then, boom, we get hit with the recession."

Fahrenkopf said Mississippi's stable gaming market can be attributed to stable, predictable tax rates and regulation. He said other states that have gone into gaming to boost struggling economies have placed taxes at so high levels that companies have failed to invest or fled elsewhere.

"Most of our companies are publicly held companies and they are responsible to their shareholders for a fair return on investment," Fahrekopf said. "I would say Mississippi, Nevada and New Jersey have a leg up in the future. Companies are looking very hard at where they are going to put their capital investment and that is not going to go into states that have unrealistic tax rates and regulation."

Tax revenue has also remained steady over the past couple of fiscal years. Mississippi's fiscal year runs from July 1 to the next June 30.

In fiscal 2003, the state collected $166.1 million dollars with local governments sharing in $109.5 million. In fiscal 2004, the state got $167.3 million and local governments $110.7 million.

In the first six months of the 2005 fiscal year -- through Dec. 31, 2004, the state had collected $80.7 million and local governments $52.8 million.