Casino takes down for year, but up for month of December
Published 11:28 am Tuesday, January 24, 2012
Mississippi casinos took in less money for the fourth straight year in 2011, but casinos statewide and in Vicksburg ended the year on a high note because December totals topped those from a year earlier.
The state’s 30 casinos won $186.1 million from gamblers in December, 1.2 percent more than in the last month of 2010, according to Mississippi Department of Revenue figures. It was the only month in 2011 that revenues were higher than the year before.
The City of Vicksburg collected $454,021 in revenue-based taxes for the month, or about 12 percent more than November. Warren County collected $215,911 in December while the school district was paid $58,213, both around 10 percent higher than the previous month.
The 19 casinos on the Mississippi River won $99.2 million, up 2 percent from $97.2 million in December 2010. The 11 on the Gulf Coast won $86.9 million, up less than half a percent from the previous December.
Last spring’s historic river flood helped drive down winnings statewide in 2011, continuing what industry observers consider a worrisome slide at Mississippi’s gambling halls. It included a downward trend for coastal casinos during the year’s final six months.
Bill Clifford, chief financial officer for Penn National Gaming Inc., told a Bank of America Merrill Lynch gaming conference last week that both the coast and Tunica markets are “rough.” Penn National runs the Hollywood Casino in Tunica, the Hollywood Casino in Bay St. Louis and the Boomtown Casino in Biloxi.
“It has been really discouraging what’s happened in the Tunica market after the flooding. I mean it just never came back,” Clifford said. “Maybe it will, we’ll see what happens. Maybe — I mean this winter will be a big test for it, because that’s when you get the snowbirds and stuff migrating back and forth between the cold North and the warmer South.”
Revenue in the river counties has been declining for years, as has the number of slot machines and table games. Larry Gregory, executive director of the Mississippi Casino Operators Association, said Tunica authorities are studying options to stem the decline.
“They recognize that their market is going down,” he said.
Revenue-based taxes paid by Vicksburg’s five casinos to the city reached $6.3 million during fiscal 2010-11, down 4.49 percent from 2009-10. Payments to Warren County totaled $2.67 million, down 3.7 percent. Fiscal years for each start Oct. 1. Local casinos pay 3.2 percent revenue tax to the state that is divided into pieces, with 65 percent to the city, 25 percent to the county and 10 percent to public schools. A second revenue tax is a 0.8 percent share of the state’s 8.8 percent revenue tax and is determined based on the population split between the city and county.
Cory Morowitz, chairman of New Jersey-based Morowitz Gaming Advisors, told The Associated Press by phone Monday that Tunica might bounce back in 2012, without the challenge of flooding, especially if the economy improves in Memphis, the largest source of customers for the market. But he warned that there has been little major investment in Tunica in years, and said the area will continue to face challenges over the long term, especially with the growth of Arkansas’ two racetrack casinos and the potential addition of casinos in Kentucky.
Competition, this time from Indian gambling in Alabama and Florida, is also a big factor in the struggles along the Mississippi coast.
Dale Black, chief financial officer of Isle of Capri Casinos Inc., likened the coast to Atlantic City, N.J., another gambling hub whose fortunes have declined because of competition. Isle of Capri operates casinos in Biloxi, Lula, Natchez and Vicksburg.
“It is kind of the Atlantic City of the South in a lot of aspects,” Black said at the Merrill Lynch conference. “What’s happened in Alabama — some of the stuff in Florida — some of the people that were driving in from the outer regions into Biloxi, I think that’s changed a little bit over the last several years. And, frankly, we don’t see a lot of game-changers in that market for a while.”
The rapid growth of casinos fueled an economic expansion in Mississippi in the 1990s, before gambling options expanded in many nearby states. But casinos nationwide have struggled during the recession. Morowitz said he expects gambling revenue nationwide to be basically flat for 2011.
“I think everyone has found out over the last year or two that we are not recession-proof,” Gregory said.
Casino tax revenue is a small slice of the state’s $4 billion-plus budget, but is closely watched. The state had projected that gambling tax revenue would grow 2.1 percent to $150 million for the budget year that began in July.
More important for the state’s economy is the number of people who work at casinos, more than 21,000 according to the state Gaming Commission’s most recent numbers.