Posted on Tue, May. 20, 2008
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Casinos take a hit
Coast down 9.5%, state off 13%
By MARY PEREZ
meperez@sunherald.com
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BILOXI --
With the prices of everything rising, it didn't come as a surprise to industry officials that gross casino revenue would fall in Mississippi and on the Coast in April.Keith Crosby, general manager of the Palace Casino in Biloxi, had just opened an e-mail from a co-worker. "Pretty ugly," it said, referring to Biloxi casino revenue sliding 16 percent compared to April 2007, the Coast down 9.5 percent and the state 13 percent lower.
March 2007 was a record-setting month at the Coast casinos but April's earnings dropped as they did at casinos around the country. On Monday the Mississippi State Tax Commission reported that the Coast casinos took in $10 million less in gross casino revenue last month, dropping from $107.2 million in April 2007 to $97.1 million this year. The river county casino profits dropped $21 million compared to last April and the state fell $31 million.
"I'm not surprised," said attorney Leonard Blackwell, former chairman of the Mississippi Gaming Commission. "I attribute it to the price of gasoline and people having less disposable income. There's worry among the consumers right now," he said, and that is translating into fewer people not just at the casinos, but at movie theaters, restaurants and hotels.
Numbers at the Palace Casino were "virtually flat," said Crosby. "The gas and the economy, no question about it," are to blame, and Crosby said it could also be an indication the Coast may have reached a casino saturation point for now. "Things are more competitive," he said.
Still the industry is looking at a bright side to the latest numbers. April is traditionally a slowdown month for Coast casinos, and Crosby said: "The revenue's fairly irrelevant. It's the profit." Numbers at Palace Casino have been stable across the board, for lodging, meals and casino revenue.
"We're still largely a drive-in market," said Blackwell, and gas prices nearing $4 per gallon are going to have an effect. However, he pointed out, "We're probably still the most affordable hospitality venue. People come here for a lot of different reasons." He said as the Coast gets more amenities and flights, he expects the area will become a national destination. "I think the Gulf Coast is a bright spot even though our numbers are down."
Margaritaville Casino will bring people from all over the world to Biloxi. "A lot of them are coming already," Blackwell's sources tell him. "People from other countries are coming because of the dollar situation."
Developer Mark Seymour said the numbers aren't keeping him from pushing ahead with plans to build Royal D'Iberville Casino on the Back Bay. "I'm getting close," he said. Although he's been told getting credit and investors is more difficult, he thinks construction costs will be lower during the slower economy. "I think there's going to be a lot of deals now."
