Casino damage could hit state hard - Friday 12th of August 2005
Fourteen-thousand gaming industry employees face uncertainty as they wait to hear how the 12 Gulf Coast casinos weathered Hurricane Katrina.
U.S. 90 is flooded and making it impossible to reach the casinos and assess the damage, but Mississippi Emergency Management Agency executive director Robert Latham reported Monday that Beau Rivage Hotel and Casino in Biloxi had flooding reaching its second floor.
The Sun-Herald in Biloxi reported on its Web site Monday that the $235 million Hard Rock Hotel & Casino in Biloxi, scheduled to open Thursday, will have to be rebuilt because the superstructure was severely damaged.
But Gaming Commission executive director Larry Gregory said, "I dont think anyone really knows the extent of it."
Gov. Haley Barbour said during a midday briefing that emergency officials had received reports of water reaching the second or third floors of some casinos.
Dan McDaniel, a Jackson gaming lawyer, said Hurricane Katrinas impact on state could be huge, depending upon how severely casinos are damaged and how long they stay shut. "The loss of tax revenue to the state is going to be immense and immediate," he said.
The state loses about $500,000 in tax revenue each day the coast casinos close, Gregory said. It was unclear how long the gambling houses would remain closed.
Deutsche Bank analyst Marc Falcone estimated Harrahs, which closed Harrahs New Orleans, the Grand Casino Gulfport and the Grand Casino Biloxi, could lose $1.8 million to $2.5 million a day in revenue and MGM Mirage, which shut down Beau Rivage, $700,000 to $1.1 million in daily revenue.
Gary Loveman, Harrahs chairman and chief executive, said Harrahs will pay employees while casinos are shuttered.
Gregory said he expects some of the larger gaming companies will follow Harrahs lead and pay their employees for the time theyre off because of Hurricane Katrina. "They know the sting employees feel while theyre off," he said.
At his 4 p.m. news conference, Barbour said there had been no reports of casinos breaking loose from moorings or having any other structural damage. But The Sun-Herald Web site Monday night cited reports that several casino barges were pulled from the water and onto land.
Gregg R. Giuffria of Las Vegas, one of the owners of Hard Rock, said Monday he was waiting to get an assessment on any damage. "We can rebuild (the casino) if we need to."
"My concern is for everyone there because Ive been through one of these," said Giuffria, who was 18 when Hurricane Camille hit the Gulf Coast on Aug. 17, 1969. He spent the night at Broadwater Beach Hotel in Biloxi.
The gaming industry has the capital to lead the coasts comeback as a resort destination, McDaniel said.
Mike Walsh, vice president of sales for the central region for International Game Technology in Oakdale, Minn., was among gaming industry members watching for news of the Gulf Coast. IGT supplies about 77 percent of slots in Mississippi casinos and has 50 total employees in the state.
The Gaming Commission ordered the Gulf Coast casinos to clear all gamblers out at 2 a.m. Sunday, and casino workers had 10 hours to move equipment and secure the structures before closing at noon.
As a precaution, the Gaming Commission ordered Mississippi River casinos in Vicksburg and Natchez to close Sunday at 9 p.m. They reopen at 7 a.m. today. The state loses about $140,000 each day the south river casinos are closed. The river figures include casinos in Greenville, which remained open.
For the 2004 calendar year, Mississippi Tax Commission figures showed casino revenues statewide were $2.7 billion.
A new state law allows floating casinos to build permanent pilings so the barges can be stabilized in hurricanes. Bernie Burkholder, president and CEO of Treasure Bay Casino, told lawmakers in March that since 2002, storms had caused more than $34 million in damage to the casino.
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