Mississippi casinos on pace to set record
Mississippi casinos are on pace to earn a record amount of money this year, although it may be hard to reach the $3 billion threshold.
“I feel pretty confident we are going to make it,” Larry Gregory, executive director of the Mississippi Gaming Commission, said. He and other industry experts predicted Mississippi casinos would earn $3 billion this calendar year.
“If we miss it, we are going to be close,” he said.
Mississippi’s gross gaming revenues reached $239.8 million in August, down $27.8 million from July. However, the state has earned more than $1.98 billion this year.
The announcement in May of Harrah’s $750 million casino shows the market’s potential, Gregory said.
Harrah’s Entertainment Inc. announced plans to open a Margaritaville Casino & Resort in Biloxi with songwriter and Pascagoula native Jimmy Buffett.
Mississippi Coast casinos posted their best August on record with $108.9 million in gross gaming revenue.
But Coast casinos’ revenue was down 12.7 percent from July, when they set an all-time, one-month record of $124.7 million .
“It doesn’t really surprise me,” Beverly Martin, executive director of the Gulf Coast Gaming Association, said of August’s lower revenue for Coast casinos.
“That’s kind of typical,” she said, because school locally starts in early August and people are occupied with that annual process.
“It really does affect the tourist season,” she said of starting school before Labor Day.
Summer traditionally has been the largest period for gaming, with the final four months of the year seeing a dip.
Mississippi casinos earned about $2.8 billion in 2004, the highest amount since gaming was legalized.
To reach the $3 billion mark, casinos must earn about $250 million a month. In 2004, the state’s record year, casinos earned about $208 million a month. So far this year, the casinos have earned just under $250 million a month.
Casino revenue is the amount of money won from gamblers, but it is not profit. The gross earnings figure represents revenue with no operating costs or other expenses deducted. And it’s casino revenue only - separate from hotel, restaurant and bar revenues generated by the resorts.
The casinos along the Mississippi River reported revenue of $130.9 million, down about $13 million from July.
The Tunica market has held its own,” said Webster Franklin, executive director of Tunica Convention and Visitors Bureau. “We had a great year last year and rebounded this year.”
In 2005, Tunica saw a large increase in revenue following Hurricane Katrina. “The Tunica market has remained strong while the Coast rebuilds,” Franklin said.
Gregory said the gaming market is shifting as companies see more and more revenue coming from nongaming activities.
“This was the first year Las Vegas companies earned more in nongaming than gaming, 65 percent to 35 percent,” he said.
Mike Bruffey, an associate with the Biloxi law firm of Brown Buchanan and a casino development consultant, said investors look at the monthly revenue, and the fluctuations “might impact the scope of their project,” causing them to scale down their plans or build in phases.
The positive numbers are creating a buzz beyond the regional market of neighboring states where the casinos traditionally market.
With casinos building and still rebuilding, “We’ll be able to tell more when we look at next month’s trends,” Martin said.
“We’re anxious to see how November is when the bridge opens. We just don’t know,” she said, whether the reopening of the Biloxi Bay bridge after more than two years will bring higher profits to the Coast casinos.
Source: Clarion LedgerÂ