News Southern Miss Professor Confident of Coast HATTIESBURG -- A desire by tourists to support the recovery of south Mississippi post-Hurricane Katrina, along with the development of more hotels along the state's coastline, will be important elements in the rebound of the area's casino industry, says a University of Southern Mississippi professor. Dr. Denise von Herrmann, chair of the Southern Miss Department of Political Science, International Development and Affairs and a renowned expert on the Mississippi gaming industry, says that people who enjoy gaming, as well as those sympathetic to those struggling to recover from the storm, are key players in the resurgence of the industry, even with only five of the original 12 coast casinos back online. The five that are open: Imperial Palace, Palace Casino, Isle of Capri, Boomtown and Treasure Bay are doing their part. For the first six months of this year, they have brought in nearly half -- 42 percent -- of what all 12 casinos generated in 2005 before Katrina. "With the ones that have reopened, the rebound in revenue was more than I would have expected, especially with the loss of the hotel rooms," she said. The redevelopment of overnight accommodations is just what the coast needs to provide to help the gaming industry as well as other area businesses. "That's the number one challenge," von Herrmann said, "hotels, hotels, hotels." Jeffrey Brewer, director of the Southern Miss Business Assistance Center on the Mississippi Gulf Coast, agreed with von Herrmann that making up the lost hotel room space needs to be a priority if tourism is to flourish. In Biloxi alone, the number of hotel rooms went from about 15,000 pre-Katrina to about 4,500 rooms because of storm damages. "With just the few casinos that are back online, we are seeing an upswing in tourism and having more hotel rooms to accommodate the increase in visitors that are coming to the casinos, as well as those visiting the mom-and-pop businesses, is a priority." Brewer said that it was also important that all of the casinos get back online as soon as possible in order to restore the coast's pre-Katrina tax base. "That will help public services get back to full strength without having to increase property taxes," he said. Von Herrmann also recommended that the Biloxi-Gulfport Regional Airport, which has recently undergone improvements, continue to be upgraded and that, from a regional standpoint, joint marketing ventures between the coast casino industry and New Orleans tourism destinations should be pursued to lift the entire region's economic fortunes. Economic muscleSo far, the five casinos have brought in approximately $374 million, compared to the first six months of last year pre-Katrina when all 12 brought in approximately $888 million. In von Herrmann's latest book, “Resorting to Casinos: The Mississippi Gaming Industry,” she notes that before Katrina, industry experts predicted that all 29 of Mississippi's non-Indian casinos (two Indian casinos are located in Philadelphia) would bring in between 8-12 million visitors to the state in 2005. In 2004, estimates showed that Mississippi casinos employed approximately 30,000 people, with an annual payroll of about $885 million. Von Herrmann cited other factors for the robust performance of the handful of casinos that are open, including the need of local residents who needed a distraction, not only to go there to gamble, but to take in a show or have dinner while other entertainment and dining venues In addition, sympathetic tourists, curiosity seekers, people already on the coast employed in redevelopment projects such as business or residential construction, debris-removal workers and those volunteering have made and are still making visits to the casinos. Von Herrmann believes it will be a year or less before all of the casinos are back up and running on the coast, despite the loss of an estimated $700 million in revenue because of Katrina. All of the casinos had business interruption insurance, but not likely for a year. "They never could have dreamed it would have been this catastrophic," she said. But the casinos that are not yet open are moving forward to get back online. An example of the industry's confidence and commitment to returning to the coast, von Herrmann said, is the Beau Rivage Casino and Resort's planned $750 million renovation and expansion of its Biloxi venue. Storm warningVon Herrmann has conducted extensive, funded research on the Mississippi gaming industry and served as the principal investigator in statewide gaming studies in 1999, 2001, and 2003. She warned in her 1999 study on the casino industry's impact about the economic harm a natural disaster like Katrina could mean to the industry. "We looked at strengths, weaknesses, opportunities and threats to the industry, including natural disasters such as hurricanes," she said. In the report, von Herrmann recommended moving the state's casino operations off their barges onto dry land to lessen the impact of a potential catastrophic hurricane such as Katrina. That would become law after the 2006 legislative session. Political cloutThe legislature's allowance for casinos to move 800 yards inland from their moorings in the Gulf was testimony, von Herrmann said, to the impact the industry has made on the state economy since it was legalized in the early 1990s. For example, 13 percent of the state's total general fund revenues originate from the state's gaming industry. There was expected initial opposition from some groups in the state when the 1992 legislation authorizing "casino vessels" was proposed and even after the devastation to the industry from Katrina, there was still some opposition from the same groups, including religious-based groups that opposed the 800-yard location adjustment. But passage of the legislation showed, von Herrmann notes, that the casino industry is not only deeply rooted in the state's economy, but in its politics. "I believe that solidified the industry as a political force in the state," she said. Von Herrmann is a public policy researcher at Southern Miss, whose work has focused upon the economic and political impacts of the casino gaming industry. She is the author of books, book chapters and articles about gaming, including her most recent book, “Resorting to Casinos: The Mississippi Gambling Industry” (February 2006 from University Press of Mississippi). She previously served as the associate dean for the College of Arts & Letters Von Herrmann is scheduled to make a presentation in late August at The National Autonomous University of Mexico's International Seminar for the Study of the Casinos and the Gambling Industry. UNAM is working on a multidisciplinary study to identify the possible consequences and impacts (economic, social, cultural, legal, and political) of legalizing the operation of casinos in Mexico. Von Herrmann will participate in the seminar's conference focusing on the topic "Evidence of Evaluation of Economic Costs and Benefits of Casinos." *About The University of Southern Mississippi* The University of Southern Mississippi, founded in 1910, is a |
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