Placing a Big Bet on the Future
BILOXI-Bernie Burkholder stands on the main floor of the gutted remnants of his three-masted pirate-ship casino here on the Gulf of Mexico, trying to salvage what he can: dented and crushed slot machines and a few craps tables. The boat used to be moored on the water, but Katrina changed all that. In a twinkling, it more or less picked the ship up and smashed it up good.
Katrina could have pretty much the same effect on Mississippi. The state bet heavily more than a decade ago that a slew of floating casinos would boost a struggling economy. It looked like a savvy wager for a while, but now, in the wake of the storm, the bet has come up snake eyes.
The roots of casino development here go back to the 1980s. Back then, statewide unemployment was nearly 14 percent. In 1990, the Legislature passed a law to legalize gambling, as long as the casinos were on the water. Since then, thousands of people have moved to the Magnolia State for gaming jobs, and some 11.5 million tourists come to try their chances with lady luck each year. Mississippi's casinos took in nearly $3 billion a year, while unemployment dropped to 6.5 percent.
New math. But that, as they say, was then. Now all 12 of the casinos operating in Bay St. Louis, Gulfport, and Biloxi when Katrina hit are shuttered or worse. The Hard Rock casino, which was about to open, is badly damaged. "Our fear is a lot of them won't want to rebuild," says Beverly Martin, head of the Gulf Coast Gaming Association. "We've got to put 17,000 people back to work."
Some casinos are half sunk, listing in the Gulf, while Katrina's tidal surge sent others careening into apartment buildings across Highway 90. The castle building that once held buffet dinners at Burkholder's Treasure Bay Casino Resort has a 21-foot-high gash in its side. Burkholder says he has no intention of rebuilding on the water. Since he's been here, he says, he has weathered two other hurricanes, each shutting down business for a couple of weeks. By the time Katrina hit, he couldn't afford insurance on the $40 million boat. He also lost his house to Katrina and wound up staying with a bunch of his employees and guests in the casino's hotel, across the road. "You cannot moor this industry on the surf line of the Gulf of Mexico," he sighs, "and expect anything else."
That's why legislators and casino owners were scrambling last week to rethink the state's gambling law. Mississippi Gov. Haley Barbour could soon call a special session of the Legislature to consider allowing land-based casinos. Casino firms like MGM Mirage and Harrah's Entertainment have started holding strategy sessions about what comes next.
Many residents of this tourist town have no idea, they say, about what the future holds. The most unfortunate saw their homes reduced to twisted husks and splintered stacks of shattered lumber. Some of the more well-to-do managed to weather the storm, but now they're spending their days shoveling out several feet of mud and water. The smell of raw sewage hovers over rich and poor alike. Tony Le, a slot-machine operator for 3 1/2 years, says he's headed back to Florida. He returned here from Pensacola, Fla., last week to pick up the few plates and bowls that remain from his house. "You can't live here," he says. "Probably, eventually, I'll return in a couple years. We'll see about the economy--if the casinos start up."
This story appears in the September 19, 2005 print edition of U.S. News & World Report.
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