In Katrina’s wake, Mississippi must mull land-based casinos

Jack Elliott Jr

Tuesday, Sept. 6, 2005 | 9:33 a.m.

Fifteen years after Mississippi legalized gambling, Hurricane Katrina may forever change the state's gaming landscape by forcing lawmakers and regulators to consider allowing casinos on land rather than just on barges.

It will be the biggest crossroads for a highly competitive industry. Former casino regulator Paul A. Harvey frequently said the casino industry changes "every minute, every day, every month, every year."

Harvey led the Gaming Commission from 1993-98, and when he left, the state had about two dozen casinos with revenue of nearly $2 billion. The industry has never reached the No. 2 gaming market that Harvey envisioned. It is still No. 3 behind Las Vegas and Atlantic City.

Before Katrina, the industry's biggest controversy was the fight over proposed gambling along the Big Black River in Warren County. The commission ruled the inland site was unsuitable, and the Mississippi Supreme Court agreed.

Casino owners and state officials long feared a hurricane on the scale of Katrina. Regulators say most of the 13 casinos in Biloxi, Gulfport and Bay St. Louis are now destroyed.

Mississippi requires casinos to float, either along the Gulf Coast or on the Mississippi River or one of its tributaries. A law enacted this year allows the floating casinos to build permanent pilings to stabilize the barges, but none of them had time to construct the pilings.

It's not clear if the reinforcement would've saved the casinos in a Category 4 or 5 hurricane.

Rep. Steve Holland, D-Plantersville, says laws should be rewritten to allow land-based casinos, but only in areas that had gambling barges before.

"I think if they had been on land, it still would have been disastrous, but not nearly as much," says Holland, a member of the House Gaming Committee.

Larry Gregory, now Mississippi's chief regulator, says the public policy is one that "will be on the minds of every legislator when they come in for the next session."

"This will definitely put the fire under their feet," Gregory says.

Some lawmakers, particularly religious conservatives, have opposed land-based casinos along the coast or the Mississippi River because they fear inland counties will push for gambling houses, too.

After the hurricane, "I think what you're going to see, politically, is a different mind-set on everything," Holland says.

Katrina's powerful winds and massive storm surge laid waste to Mississippi's coast, tossing some of the casinos like toy boats. The disaster crippled half of the state's $2.7 billion gambling industry.

Gary Loveman, Harrah Entertainment's chairman and chief executive, says putting casinos on boats never makes sense. It's been a running debate since the state legalized floating casinos in 1990 and the first one opened in 1992.

"It's not simply an inconvenience," Loveman says. "It's a public safety problem."

Loveman, who runs the world's largest gambling company, says Harrah's will rebuild on the Gulf Coast but will take a hard look at putting a casino on a barge again.

About 14,000 people work in the casinos along the Mississippi coastline. Each casino has a land-based hotel, and thousands more employees work in those.

Beverly Martin, executive director of the Mississippi Casino Operators Association, says -- perhaps optimistically -- that she expects casinos could reopen in six months to a year.