JACKSON, Miss. (AP) — While Mississippi River flooding helped drive down winnings at the state's casinos in 2011, the drop also continues what industry observers consider a worrisome slide at Mississippi's gambling halls.
Gamblers lost $2.24 billion in the state's casinos last year, down 6.3 percent from 2010 and the lowest amount since 1998. The take at Gulf Coast casinos dropped less than 1 percent, but winnings at river casinos fell 11 percent for the year, as Mississippi River flooding hurt business at casinos in April, May and June.
It's the fourth straight year that Mississippi casinos have taken in less, after hitting a record high of $2.89 billion in 2007.
December was brighter, though, with Mississippi casinos taking in 1.2 percent more money from gamblers than in the last month of 2010. It was the only month in 2011 that gambling revenues were higher than the year before.
The 19 river casinos won $99.2 million, up 2 percent from $97.2 million in December 2010, according to Mississippi Department of Revenue figures.
Winnings at the 11 coast casinos totaled $86.9 million, up 0.4 percent from $86.6 million the previous December.
After showing signs of growth in the first half of 2011, coast casino winnings began to shrink again. Those casinos were already showing revenue declines before the waters rose in the spring.
Bill Clifford, chief financial officer for Penn National Gaming Inc., told a Bank of America Merrill Lynch gaming conference last week that both the coast and Tunica markets are "rough." Penn National runs the Hollywood Casino in Tunica, the Hollywood Casino in Bay St. Louis and the Boomtown Casino in Biloxi.
"It has been really discouraging what's happened in the Tunica market after the flooding. I mean it just never came back," Clifford said. "Maybe it will, we'll see what happens. Maybe — I mean this winter will be a big test for it, because that's when you get the snowbirds and stuff migrating back and forth between the cold north and the warmer south."
Revenue in the river counties has been declining for years, as has the number of slot machines and table games. Larry Gregory, executive director of the Mississippi Casino Operators Association, said Tunica authorities are studying options to stem the decline.
"They recognize that their market is going down," he said.
Cory Morowitz, chairman of New Jersey-based Morowitz Gaming Advisors, said by phone Monday that Tunica might bounce back in 2012, without the challenge of flooding, especially if the economy improves in Memphis, Tenn., the largest source of customers for the market. But he warned that 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 the growth of Arkansas' two racetrack casinos and the potential addition of casinos in Kentucky.
Competition, this time from Indian gambling in Alabama and Florida, is also a big factor in the struggles along the Mississippi coast.
Dale Black, chief financial officer of Isle of Capri Casinos Inc., likened the coast to Atlantic City, N.J., another gambling hub whose fortunes have declined because of competition. Isle of Capri operates casinos in Biloxi, Lula, Natchez and Vicksburg.
"It is kind of the Atlantic City of the South in a lot of aspects," Black said at the Merrill Lynch conference. "What's happened in Alabama, some of the stuff in Florida — some of the 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."
The rapid growth of casinos fueled an economic expansion in Mississippi in the 1990s, before gambling options expanded in many nearby states. But casinos nationwide have struggled during the recession. Morowitz said he expects gambling revenue nationwide to be basically flat for 2011.
"I think everyone has found out over the last year or two that we are not recession-proof," Gregory said.
Casino tax revenue is a small slice of the state's $4 billion-plus budget, but is closely watched. The state had projected that gambling tax revenue would grow 2.1 percent to $150 million for the budget year that began in July.
More important for the state's economy is the number of people who work at casinos, more than 21,000 according to the state Gaming Commission's most recent numbers.
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