Harrah’s is hoping to build temporary Mississippi casino

By Liz Benston (contact)

Friday, Sept. 2, 2005 | 11:02 a.m.

Harrah's Entertainment's top executive is recommending the Mississippi government allow the company to build a temporary casino on land to replace its Grand Casino Biloxi riverboat, which was hurled ashore and destroyed in Hurricane Katrina.

The temporary casino, without a hotel, could be built relatively quickly and could "start to generate some revenue" for the state, Chief Executive Gary Loveman said.

Mississippi's Gulf Coast has been decimated by Katrina. Both its riverboat-based tourist economy and its local economy have been destroyed. When asked about the appropriateness of opening a casino amid the destruction, Loveman said the casino would draw from a wider region and would generate more tax revenue for the state than, say, a hotel.

"We would draw from a three-hour perimeter," he said. "That would be a start."

Harrah's also owns the Grand Casino Gulfport in Mississippi, a riverboat casino that was destroyed, and a land-based casino in New Orleans that sustained only modest damage. Harrah's owns more casinos that were hurt by Katrina than those owned by any other Las Vegas operator.

Loveman said he's been appalled by recent developments in New Orleans, calling the situation among hungry refugees "an urban meltdown."

Loveman said he would be leaving for the area today. "I want to see it with my own eyes," he said.

When and where the company will be allowed to rebuild its Biloxi and Grand Casino Gulfport properties and whether they would be farther inland and in more secure locations "will depend on if the law changes," he said. Loveman later said there was a "good chance it will be changed."

Mississippi law now requires casinos to be built on boats or pontoons over water, though a change implemented last month allows casinos to be built on pilings over water. Some observers say the riverboat requirement will end because of the damage wrought by the storm, which tossed many riverboats ashore.

Loveman discussed the matters after a press conference Thursday given by pop singer Celine Dion in which she announced a $1 million donation to the American Red Cross to help hurricane victims. Dion performs her "A New Day" show at the Caesars Palace Colosseum, a Harrah's property.

The money will come from show proceeds.

Loveman and Dion also were on hand Thursday for a grand opening of Caesars' Augustus hotel tower. The 949-room hotel tower caps off a transformation of the property that began in 2003 when previous owner Caesars Entertainment opened the 4,100-seat Colosseum.

"We're talking about towers and some people today don't have homes," Dion said. She said she was "proud" to be part of the new company and called it "very generous."

Harrah's picked up Caesars Palace when it bought Caesars Entertainment in June.

The company is paying its more than 6,000 workers who've lost jobs in Katrina's aftermath for the next three months and has set up relief centers near the region. It also donated $1 million to the relief effort. Loveman said Thursday the company is still struggling to contact workers and make sure they get their paychecks.

The company moved Thursday to waive employee costs and restrictions for medical benefits and services, allowing those workers to obtain prescriptions, eyeglasses and other items that may have been lost in the storm.

The company is also looking into further compensating casino workers who get much of their wages from tips and whose take-home pay will be significantly reduced.

"These days are filled with hundreds of little decisions," Loveman said. "But they're important decisions."

Late Thursday, Boyd Gaming Corp. announced the company will continue to pay its roughly 1,000 employees of its shuttered Treasure Chest casino for the next eight weeks.

That's "assuming we are still closed, and then we will re-evaluate the situation at that time," Boyd Chief Executive Bill Boyd said in a statement.

The company, like some others, has set up an employee hotline and other relief effort information on its Web site. It also has set up a relief center for refugees at its Sam's Town Tunica casino in Mississippi.

The Treasure Chest riverboat floats on Lake Pontchartrain near New Orleans. A preliminary look indicates that it was "not significantly damaged" in the storm but the company wouldn't say when it could reopen.