Casino Gambling

Are two more casino sites in the cards for South Mississippi?

A 2008 artist’s rendering of Veterans Avenue in Biloxi if the proposed South Beach Resort and Casino were built.
A 2008 artist’s rendering of Veterans Avenue in Biloxi if the proposed South Beach Resort and Casino were built.

Players who aren’t winning at one slot machine move to another, and two companies whose casino-site approvals in Biloxi and Diamondhead were denied years ago will try their luck this week with three new members of the Mississippi Gaming Commission.

The commissioners’ decision will be one of the defining rulings of 25 years of casinos in Mississippi. Approving these two casinos could change the rules and open many more South Mississippi sites to casinos. Denying site approval to one or both could mean the loss of hundreds of jobs and millions in economic development.

A public hearing for the two casino sites will follow the regular meeting of the Gaming Commission, which will begin at 9 a.m. Thursday at D’Iberville City Hall.

A vote won’t be taken Thursday, said Allen Godfrey, executive director of the Mississippi Gaming Commission. The hearing is for the developers to show a footprint of the casinos they propose and argue points of site approval. It isn’t a time to hear about the economic benefits of either casino, he said, although there may be time for public comment at the end of the meeting.

When a vote is taken at the March meeting or a subsequent meeting, Godfrey will make his recommendation on site approval for both casinos. If he recommends denial, the vote of the commissioners must be unanimous for the site to be approved.

How we got here

The commission in 2008 turned down RW Development’s request to build a casino at U.S. 90 and Veterans Avenue in Biloxi .

Jacobs Entertainment, a company based in Colorado, lost its bid for site approval on land west of Yacht Club Drive in Diamondhead in 2014.

Representatives of the two companies said at the time they would keep fighting. Both applicants could have appealed their decisions to a circuit court and the state Supreme Court but instead chose to wait until three new commissioners were in place and resubmitted their applications late in 2016.

Sun Herald reporter Mary Perez gives you a guided tour of the new Scarlet Pearl Casino Resort in D'Iberville on Wednesday, November 18, 2015. The long-awaited casino will open Dec. 9.

The Mississippi Gaming and Hospitality Association, which represents casinos throughout the state, sent a letter Friday to the Gaming Commission objecting to the applications. The organization said both sites were denied for a variety of reasons and nothing has changed in the interim.

“The law has not changed, the legislative intent has not changed, the applicants are the same, the proposed sites are the same and the decisions of the commission should be reaffirmed,” Larry Gregory, executive director of the MGHA said in the letter that lays out the reasons for the site denials and provides the minutes of the meetings.

“How the commission reacts to these applications has implications beyond just these two properties,” he said.

The commissioners

The commissioners, appointed by Gov. Phil Bryant, are Jerry Griffith Sr. and Chairman Al Hopkins, both of Gulfport, and Tom Gresham of Indianola.

Hopkins, whose term expires Sept. 30, has shown his cards on casino expansion. In 1994, he said the commission should not have rejected Royal Casino’s application for a casino site on Bayou Bernard — on the northeast corner of Interstate 10 and U.S. 49 near the present Crossroads shopping area in Gulfport — because a state Supreme Court ruling from the 1930s said Bayou Bernard is part of Back Bay in Biloxi.

Robert Engram of Gulfport was one of two commissioners who voted against it, saying the site would violate gambling laws because it isn’t part of the Mississippi Sound, the Bay of St. Louis or Back Bay, the only areas where casinos are allowed in South Mississippi.

Last year, the commissioners proposed changing regulations but pulled the matter off the October agenda without a vote. The proposal would have removed the requirement that a developer must own or control the land all the way to the water, which was the reason for denial for RW Development.

Hopkins told the Sun Herald at the time the changes would bring casino regulations in line with the law.

RW Development

Thursday’s meeting likely won’t have the drama of the July 17, 2008, meeting when, the Sun Herald reported, “A collective gasp was heard at the Biloxi Community Center Thursday when Gaming Commissioner Jerry St. Pé made a motion to deny RW Development’s proposal to build what was then called South Beach Casino on U.S. 90 at Veteran’s Avenue.”

St. Pé, John Hairston and Nolen Canon voted unanimously to deny the site and the commissioners said it came down to RW Development not having control of the beach to the water’s edge as required by state law. A strip of public sand beach lies between the RW land and the water.

RW lawyers had argued the seawall is the water’s edge. But Hairston said using the seawall as the shore would open up “a proliferation of casinos” and would go beyond what the Legislature intended when it allowed onshore casinos after Hurricane Katrina.”

RW Development owner Ray Wooldridge didn’t sit idly by, waiting for another chance before the Gaming Commission. He’s since built Big Play Entertainment Center with miniature golf courses, a bowling alley and other attractions on the northwest side of U.S. 90 and Veterans, and operates South Beach Hotel and leases restaurants in Biloxi.

The Biloxi Business Men’s Club on Thursday adopted a resolution backing the RW Development site approval on 17 acres. The resolution says Wooldridge has invested more than $100 million in Biloxi and that the site complies with state legislation passed after Hurricane Katrina in 2005 to allow casinos within 800 feet of the mean high-water line.

Jacobs Entertainment

Officials at Jacobs Entertainment have been persistent in their quest to build a casino in South Mississippi. The company first looked at D’Iberville but pulled out of that proposal in 2004 and later moved on to Diamondhead.

In 2009, the Hancock County supervisors denied a zoning change for a Jacobs casino at what had been the Harbor House condo development until Katrina damaged it, saying they were concerned about traffic and a casino in a residential area.

Diamondhead became a city in 2012 and once zoned for a casino, the site along Paradise Bayou went to the Gaming Commission in June 2014. By that time, Wally Carter had replaced St. Pé on the commission. The commissioners approved Scarlet Pearl Casino in D’Iberville but voted 3-0 to deny Jacobs’ application, saying the property was not on the Bay of St. Louis but on a man-made canal. There also is a large area of marshland between the Bay of St. Louis and the casino site.

Diamondhead residents Frank and Jerilyn Faulstich were among the neighbors who had opposed the casino and now are concerned to see the issue return.

“Casino site approval should not be based on potential revenue or need,” Frank Faulstich said in an open letter to the commission. “It should only be decided on the law as it applies to a particular site. You as a gaming commissioner have accepted the responsibility of applying the laws and regulations when deciding the legality of each site application.”

Faulstich said the consequences of not following the law will be far-reaching.

“Casino operators won’t be able to rely on the stability of the enforcement of the gaming laws in formulating business plans,” he said. “Citizens on the Mississippi Gulf Coast will become apprehensive because the locations where the casinos are legal or illegal will become blurred.”

Blaine LaFontaine, who first served on the Diamondhead Council and now is president of the Hancock County Board of Supervisors, said the supervisors supported Jacobs’ casino with a resolution because of the positive impact it would have on the county and city. It would bring new jobs and more hotel rooms that are desperately needed, he said.

County officials have met “sparingly” over the past several months with representatives of Jacobs Entertainment, he said, but the supervisors have studied the facts.

“We know the arguments, the pros and cons of expanding gaming,” LaFontaine said.

He doesn’t think a new casino with visibility from I-10 would have much impact on the county’s other casinos, Hollywood Gulf Coast and Silver Slipper, because those casinos away from the interstate have a loyal customer base and amenities.

Line in the sand

In the end, the decision will come down to the interpretation of the law by the three commissioners who on Thursday will hear about the mean high-water line, the toe of the seawall and MS Code 29-15-1, which defines these terms.

Michael Cavanaugh, attorney for RW Development, also represented Jacobs Entertainment in the prior site approval and said, “We look forward to a fair hearing on the 16th.”

The Scarlet Pearl Casino opened on Wednesday, Dec. 9, 2015.

If you go

What: Gaming Commission hearing

On the agenda: Approval for casino sites in Biloxi and Diamondhead; a vote won’t be taken

When: After the 9 a.m. regular meeting Thursday

Where: D’Iberville City Hall, Automall Parkway