Casino Closure Means $87 Million Loss in Gaming Revenue for May
Tunica, Miss. – The staggered casino closing plan implemented by the Tunica casino industry, in conjunction with Emergency Management officials and the Mississippi Gaming Commission, was completed yesterday afternoon with the scheduled closing of the three casino properties located at Casino Center (Gold Strike Casino Resort, Horseshoe Casino & Hotel, Tunica Roadhouse Casino & Hotel).
The plan, put into effect on Wednesday, April 27, was designed to allow all gaming industry employees and Tunica county visitors to safely leave the unprotected side of the Mississippi River levee system well in advance of the rising water. The Mississippi Gaming Commission and gaming executives have successfully completed the extensive closure procedures that include the protection of gaming equipment and the removal of all money from each facility.
“With the Mississippi River now expected to crest at 48 feet in Memphis, we have secured all casino properties and assets and are preparing the area the impending flood waters,” said Tunica County Emergency Coordinator Chief Randy Stewart. “As of now, only those essential gaming industry personnel along with emergency management officials will be allowed to cross the Mississippi River levee.”
Officials from the Mississippi Department of Wildlife and Fish and the Department of Homeland Security have arrived in Tunica County to assist local law enforcement personnel in patrolling all access points to the county’s nine casino properties.
The closures only affect those properties on the unprotected side of the levee. As previously noted, Veranda and Terrace Hotels at Harrah’s property on the east side of the levee, the Harrah’s Convention Center, the Bellissimo Spa at Harrah’s, Cottonwoods Golf Course, Tunica National Golf & Tennis, and Casino Factory Shoppes are all open and will remain open for business as usual.
At this time, the casinos are projected to be closed for a minimum of three to six weeks, but those timeframes could change considerably based on the river’s rise.
The anticipated floodwaters carry with them the potential to further devastate a Tunica economy that has been hard-hit by the economic downtown. The Tunica market has declined 25% since 2006. The 8% gaming tax generated $93 million for the state and $47 million for Tunica County in 2006. Last year's collections for the state were $23 million less (at $70 million) and $12 million less (at $35 million) for the county. The area has also seen a loss of 3,400 jobs during that period, equating to over $68 million in annual payroll.
“No one wants to see our area’s chief industry facing such a profound loss in profits, but our casino partners acted quickly and proactively in order to safeguard the safety of their employees and patrons,” said Webster Franklin, CEO of the Tunica Convention & Visitors Bureau. “The closing of our nine casino properties will only exacerbate an already major economic crisis on a state and local level. It is our hope that the rising water will recede rapidly however, if it gets as high as predicted, our situation becomes even more perilous. A crest of 48 feet has the real potential to cause structural damage to our casinos and further delay our area’s recovery.”
Franklin noted that should the river levels rise as high as predicted, the recovery effort would be long-lasting and would require a cooperative effort on the part of all key stakeholders.
The casino closings in Tunica will have the following economic impact in the short-term:
The average gross gaming revenue from Tunica’s nine casinos during the month of May over the past three years is approximately $87 million. Closing the casinos for the month would lead to a combined $10 million loss in local ($3.54 million) and state ($7.08 million) gaming tax revenue.
Approximately 4,600 hotel rooms have been closed, equating to $6,210,000 in lost room revenue per month (assuming 75% occupancy at $60 per night).
The closing of all nine casinos affects 38% of the state's gaming square footage or 521,410 square feet.
Approximately 9,300 jobs have been displaced with an approximate $18 million monthly payroll. Most casinos have announced that they will be compensating their employees for a minimum of two weeks during the event, but the situation is different at each property.
Emergency Management crews have conducted extensive ground and aerial surveys of the casino properties in order to establish a photographic baseline to assist in determining when it is safe to reopen.