by: Glenn Haussman.
Online Gambling.
More than a year after Hurricanes Katrina and Rita, the Louisiana Attorney General Office has released a comprehensive analysis of the Louisiana and Mississippi gaming markets.
Louisiana Gaming: An Inside Look
The report was meant to understand how the reemergence of Mississippi gaming and the possible legalization of gaming in Texas might affect the market.
“The purpose in drafting this report is to provide information, not to take a position on gaming in Louisiana,” Attorney General Foti stated. “We have compiled information from various sources that we hope proves helpful and informative to the industry, the legislature and the public.”
The report is entitled: Casino Gaming in Louisiana, A Comparative Analysis of the Economic Impact and Post Hurricane Development of Casino Gaming in Louisiana and Mississippi
In Louisiana there are currently 20 casinos, though four of them have yet to reopen. The state has gaming in traditional Las Vegas style casinos, rasinos -- which are casinos located at racetracks -- and riverboats. The casinos are located in four distinct geographic areas: Shreveport/Bossier, Lake Charles, Baton Rouge/Lafayette and New Orleans. The state’s largest casino is Harrah’s New Orleans which features more than 100,000 square feet of casino space in the city’s French Quarter.
Since its inception, the casino industry has spent more than $2.8 billion on capital expenditures in Louisiana. According to the report, capital expenditures have a multiplier effect which means there have been increased capital expenditures which have increased local business sales as well as household earnings and lowered the rate of unemployment.
Additionally, its estimated capital expenditures by riverboat and land based casinos generated $524 million in business sales, $169.5 million in household earnings and 5,662 jobs.
Interestingly, there was a significant up-tick in casino gaming revenue in Louisiana in the months following Katrina and Rita, particularly in the New Orleans and Baton Rouge markets. The revenue increase is directly correlated to the storm. The report said, “Baton Rouge” is experiencing a population increase and New Orleans is experiencing an influx of relief workers and new money.” This population growth, the Revenue Estimating Conference estimates, will propel the market to 5.4% ($18.3 million) growth in riverboat revenue for fiscal year 05-06.
The boats alone saw a colossal jump of 25.6% increase in February 2006 as compared to February 2005, and a 25.4% bump in March 2006 as compared to March 2005. Also compared to 2005 revenues in April, May and June 2006, revenues were up 17.3 percent, 11.3 percent and 8.5 percent respectively.
On the Mississippi Gulf Coast the market in the midst of a major shift in where new casinos will be constructed in the future. Because many of the regions water-based casinos were irreparably damaged during the summer of 2005 the Mississippi legislature passed a law in October 2005 allowing Gulf Coast casinos to build new and replacement structures on lad up to 800 feet from the mean water line. This is opening the doors to a new wave of development and a rethinking of the types of casinos that will now be built. The casinos are moving to bringing a more total resort experience to the region mimicking the mega casinos in Las Vegas.
The potential capital investment in these projects is reported to be in excess of $5 billion, the report stated. Also on the horizon is the possibility Texas will legalize casino-style gaming in the future.. The report indicated that certain legislators in the state have been attempting to pass “certain forms of legalized casino-style gaming since 2003.” A new lobbying campaign with motto “Tax Us” is now underway to champion the issue.
• In January 2006 with only three casinos open, the Mississippi Gulf Coast generated $64,217,676 in gross gaming revenue. This is 54% of the revenue earned in January of 2005 with twelve operating casinos.
• In July 2006, the Gulf Coast casinos generated $74,362,392 in gross gaming revenue ,which is 73% of the business done in July 2005.
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