Florida could bleed Mississippi Coast casinos: Tribal pact awaits ruling

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By Michael Newsom -- The Sun Herald, Biloxi, Miss.

JACKSON, Miss. (MCT) - A study ordered by a lawmaker predicts that legalizing slot machines and card games at Seminole Tribe casinos in Florida could, worst case, reduce Mississippi Coast casino revenue by about 9 percent.

But the head of the Legislature;s Joint Committee on Performance Evaluation and Expenditure Review group, which did the study, admits some major data was not available to researchers.

''I certainly wouldn't say the number is 100 percent accurate,'' PEER Executive Director Max K. Arinder said. ''You're dealing with a hypothetical. If you looked at the same information we looked at, looked at who gambles and where they come from, you would probably arrive at a similar conclusion. Based on what we have available to us, this is a reasoned analysis.''

The Seminole Tribe made a deal with Florida Gov. Charlie Crist to allow Vegas-style slot machines, as well as blackjack, baccarat and some poker tournaments; but the Florida House sued Crist, saying he didn't have the authority to make the deal. If the court sides with Crist, casinos in Tampa, St. Petersburg, Miami, Fort Lauderdale and other cities across the state would offer a wider variety of popular games. The closest casinos to South Mississippi would be in the Tampa area.

The potential effect of the changes in Florida on the Mississippi Coast worries some, so state House Gaming Chairman Bobby Moak, D-Bogue Chitto, asked for the PEER study.

According to PEER, about 18.6 percent of the Mississippi Coast's casino patrons come from Florida. If the state were to lose half of those customers, which researchers believe is a worst-case scenario, the Coast could lose about 9.3 percent of its business. If it were to lose one-fourth, which researchers believe is a more realistic loss, business would be down about 4.65 percent.

One major piece of data that is unknown is what parts of Florida do Mississippi casino patrons come from, which matters because drive time seems to be a major factor. Coast leaders have lamented for years that the area hasn't been able to attract many customers from beyond 700 miles.

But House Gaming Committee member Rep. Diane Peranich, D-Pass Christian, said the report is troubling.

''This is such a major story,'' Peranich said. ''Just the potential impact is terrible.''

The study concludes that the Florida casinos would have similar attractions as the ones in Mississippi. Peranich said House Bill 1196, which she offered, is pending in the Legislature this session and it could stave off potential losses.

Under Peranich's plan, tax breaks would be given to casinos that invest more than $10 million in non-gaming developments. It covers theme parks, water parks, cultural or historical centers, motor speedways or other large, non-gaming tourist attractions. The bill would also provide incentives for hotel investments of more than $40 million, as well as golf courses with investments of more than $10 million.

The incentives bill would allow a casino to recoup up to 30 percent of the project's value over a 10-year period by giving it access to a percentage of the sales tax the project creates. Coast senators said the incentives would likely bring much investment on attractions in the state from casino groups.

Last year, the provision to give the incentives to casinos died in conference, as anti-gaming Senate factions stripped the benefits from casino companies. Other businesses are allowed the tax incentives now.

Peranich's bill is expected to go to conference so the House and Senate can work out differences over the bill. The bill is tied to a deal that would prevent casinos from expanding to counties where they aren't presently legal, but legislators haven't voted yet to take the moratorium bill and the incentives bills to conference.

Mississippi has 29 licensed casinos: 11 on the Coast, 10 in the Tunica area, and eight in the lower Mississippi Delta along the Mississippi River, the report said. Those casinos produced $2.8 billion in gross gaming revenue in the 2007 fiscal year. Of that, $221.8 million was paid to the state in taxes, and $110 million was given to municipalities. Florida has roughly one-fourth as many casinos as Mississippi, and the Crist deal would prevent gaming from expanding to new sites.

Arinder noted it could be a while before the situation becomes critical, as the Florida plan still hinges on court approval.

''It's just good business to have a contingency plan in the back of your mind in case these things develop,'' Arinder said.

Copyright (c) 2008, The Sun Herald, Biloxi, Miss. Distributed by McClatchy-Tribune Information Services.