With the city’s fifth casino set to open late next month, Vicksburg is the third largest revenue-producing gambling market in Mississippi, the nation’s third-largest gambling state.

And while the national gaming industry has slumped with the economy over the past year, in Mississippi, gaming commissioners, casino operators and industry experts are optimistic the Vicksburg market is poised to grow.

“You don’t really want to see a casino open

and then just take a split of the pie,” said Allen Godfrey, Mississippi Gaming Commission deputy director. “We feel Riverwalk is going to be very successful, but time will tell if they take a part of the market share in Vicksburg or if they will expand the market.”

The $100 million Riverwalk Casino and Hotel will feature 805 slot machines and 18 gaming tables on its 25,000-square-foot gaming floor. Two restaurants, an 80-room hotel and ambitious landscaping project also are in the works. Several artists from Mississippi and neighboring states have been tapped to create works of art in Vicksburg that will be featured in the casino. A river walk will be built outside the casino featuring a sculpture garden with native plants. Additionally, a large meeting space built on the second floor of the casino will be available for large meetings and weddings.

Rob Long began working with casinos in Vicksburg in 1994 as the founding general manager for Rainbow, he also was involved in the planning of Ameristar Casino and was its general manager from 1997 until 2000. He has also worked at casinos in Biloxi, Nevada and Missouri.

Now, as president and general manager of Riverwalk, he is confident the casino’s unique amenities will bring new gamblers to Vicksburg.

“This is going to be a very different casino than what Vicksburg currently has” and should attract people who don’t normally come to Vicksburg to gamble, said Long.

Derris Newman, vice president of research for Innovation Group — which has conducted studies of the Vicksburg casino market share in the past — said at least some growth is to be expected.

“If somebody’s expanding or bringing in a new facility, of course, there’s going to be a little growth,” he said, “and there’s going to be some cannibalization.”

Concerns about market share arose in Greenville last fall when Harlow’s opened the city’s third casino, but Godfrey said the addition of another casino proved the market had room to grow. He thinks the same might well be true in Vicksburg.

“There were a lot of questions about the Greenville market, but (Harlow’s) was able to expand it,” Godfrey said.

Aside from Mississippi residents, the state’s casinos draw heavily from gamblers in Louisiana, Alabama, Florida and Arkansas. From Vicksburg, Louisiana and Arkansas are both within the day-drive market, and much of the growth here could come from those states. 

Louisiana law restricts the number of gaming licenses available, allowing for a maximum of 15 riverboat casinos and one land-based casino in New Orleans. Thirteen of those licences are filled. Arkansas has no legal gambling beyond dog and horsetrack racing. Mississippi, by contrast, has no restrictions on the number of casinos that can receive gaming licences.

“If you are not a gambler now, you’re probably not going to become one just because Riverwalk is opening. But, I think Vicksburg could become a bigger draw for out of state and Mississippi gamblers outside Vicksburg,” said Godfrey.

In addition to Riverwalk, other developments in casinos in Vicksburg this year have been major. DiamondJacks Casino spent $18.5 million in the spring making improvements and re-branding its casinos in Vicksburg and Bossier City — both formerly Isle of Capri casinos.

Ameristar Casino — the city’s largest — completed a $100 million expansion in June that includes an eight-story parking garage, a live poker room and an expanded gaming floor with about 500 slot machines and table games. Two additional restaurants opened last week, a V.I.P. lounge opened in July and a gift shop is expected to open in coming months as part of the expansion.

Although a Starbucks also was planned, Ameristar public relations manager Bess Averett said the coffee colossus has backed out of the agreement — one of hundreds of coffee shops the company decided against opening as profits lagged.

Some casinos in the Shreveport and Bossier City market apparently have taken notice of the growth in Vicksburg. Horseshoe Casino and Hotel ran a radio and billboard campaign months ago in the Monroe area — which is about halfway between Shreveport and Vicksburg — that simply urged gambers: “Don’t settle for Vicksburg.”

Six casinos operate in Shreveport and Bossier City. Horseshoe Casino spokesmen did not return calls for comment on the extent of the ad campaign.

“Obviously, Vicksburg is doing a pretty good job if they’re spending their money trying to get people to not come to Vicksburg,” said Godfrey, adding he believes Vicksburg can take a piece of the market share from the Shreveport area due to Louisiana’s limitations on the number of casinos and their sizes.

The Vicksburg Mayor and Board of Aldermen and the Warren County Board of Supervisors, however, are not assuming casino growth will automatically lead to growth in the gaming tax revenues they receive each month. Neither board predicted additional gaming tax revenue in the next fiscal year when they budgets for the fiscal year beginning Oct. 1. The city — the largest benefactor of gaming tax revenue — lowered its projected revenue from casinos by $200,000. The reasoning could be due to the fact that the city overestimated casino tax revenue by about $250,000 this fiscal year.

August casino tax revenues paid to the city, county and school district are down slightly from a year ago, which has been the case for nearly each month’s collections this year. With one month left in the fiscal year, the total collections from the 3.2 percent revenue tax collected by casinos in Vicksburg are at $7.33 million, down from $7.59 million collected last year to date.

Mississippi casinos have been following a national track of either flat or reduced gambling revenue on a state-to-state basis — due largely to added gaming outlets and overall economic conditions. Despite some closings due to Hurricane Gustav, Gulf Coast casinos posted bigger winnings last month than in August 2007, taking in $112.1 million, compared with $108.6 million a year ago. Casinos located in the Mississippi River counties, including Vicksburg, Tunica and Natchez, won $126 million last month, a slight drop from $130.7 million in August 2007. The two casinos outside Philadelphia are not required to pay state taxes or report winnings because they are owned by the Mississippi Band of Choctaw Indians.

Overall, Mississippi’s 29 casinos are doing better than those in the top two markets nationally, said Godfrey, and should emerge in even better shape if and when the economy begins to strengthen. 

“Until recently, the analysts have said the gaming industry is recession proof. What we’ve found out is it’s not. But while Las Vegas’ and Atlantic City’s numbers are down, Mississippi’s are not,” he said. “That says a lot about the quality of the properties and the product available here.” 

Casino tax revenue

Vicksburg’s four casinos pay a 3.2 percent revenue tax to the State of Mississippi that is divided, with 10 percent going to schools, 25 percent to Warren County and 65 percent to the city. A second revenue tax is a 0.8 percent share of the state’s 8.8 percent revenue tax. It is split based on population proportions between Vicksburg and Warren County. These are the latest receipts.

August 2008

City    $525,454

County    $247,454

Schools    $67,209

Fiscal year to date

City    $6,495,212

County    $2,700,175

Schools    $733,359

August 2007

City    $530,120

County    $249,640

Schools    $67,805

Last fiscal year to date

City    $6,536,657

County    $2,797,743

Schools    $759,944

• Vicksburg’s four casinos also pay annual property taxes to the city and Warren County.

• Vicksburg’s casinos pay a $150 annual fee per gaming position at various times each year. Last fiscal year, the city collected $595,050 in gaming position fees. This fiscal year, the city has collected $761,757, including a payment from the city’s fifth casino which will open in late October.