State industry observers in Mississippi have told of their concerns over the state’s casino revenues as figures slid even further for the year 2011.
Although the Mississippi River flooding – which caused a drop in business throughout April, May and June – is obviously somewhat to blame for the drive down in winnings. However, the state’s casinos earned $2.24 billion in total last year. That might sound pretty substantial, but that’s down 6.3% from 2010 and is the lowest amount since 1998, CBS Money Watch reports.
The take at Gulf Coast casinos may have dropped by a mere 1%, but winnings at river casinos fell by 11% for the year and it’s the fourth straight year that Mississippi casinos have taken in less, after hitting a record high of $2.89 billion in 2007.
Nevertheless, if December was anything to go by – the state’s gambling halls may be saved after all. In the last month of 2011, casinos took 1.2% more money from gamblers than in the last month of 2010, even if it was the only month in 2011 that gambling revenues were higher than the year before. The 19 river casinos won $99.2 million, which was up 2% from $97.2 million in December 2010, according to Mississippi Department of Revenue figures. And Winnings at the 11 coast casinos totalled $86.9 million, up 0.4% from $86.6 million the previous December.
But was it just down to a surge in hopefuls trying to strike it lucky in a bid for extra Xmas dosh?
Regardless to say, the future of Mississippi’s gambling industry seems pretty uncertain. Here’s what the industry dudes had to say about it all:
- Chief financial officer for Penn National Gaming, Bill Clifford, who runs the Hollywood Casino in Tunica, said at a gaming conference last week that both the coast and Tunica markets are “rough,” stating: “It has been really discouraging what’s happened in the Tunica market after the flooding. I mean it just never came back.”
- Executive director of the Mississippi Casino Operators Association, Larry Gregory, agrees – saying revenue in the river counties has been declining for years. “They recognise that their market is going down,” he said.
- But it might not all be doom and gloom for the Magnolia state, as Chairman of New Jersey-based Morowitz Gaming Advisors, Cory Morowitz, said on Monday that Tunica might “bounce back” in 2012, as long as there’s no more flooding that is. He did warn, however, 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 Arkansas’ two racetrack casinos growing like weeds.
- Chief financial officer of Isle of Capri Casinos, Dale Black, highlighted competition from Indian gambling in Alabama and Florida is also a big factor in Mississippi’s gambling exertion. Likening the state’s coast to Atlantic City – another place where fortunes have declined because of competition – he said: “It is kind of the Atlantic City of the South in a lot of aspects. What’s happened in Alabama, some 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.”
As well as the floods in the spring, the recession also played a factor in pushing back the economic growth that Mississippi’s casinos saw in the ‘90s before gambling expanded in nearby states. Morowitz said he expected gambling revenue nationwide to be basically flat for 2011 for this reason, with Gregory adding: “I think everyone has found out over the last year or two that we are not recession-proof.”
Casino revenue are a slice of the state’s $4 billion-plus budget, and the state’s economy is propped up a large number of people who work at its casinos, (21,000 to be more precise) so let’s hope Mississippi can pull back it’s gambling industry before it loses out to the expanding states that surround it.