Wager unplanned, but state big winner on casinos
Published 12:00 am Sunday, February 14, 2010
It was 20 years ago that Mississippi’s economy got its biggest boost since invention of the cotton gin.
Come to think of it, Mississippi wasn’t yet a state when Eli Whitney’s machine, which could pick the seed from 50 pounds of cotton bolls a day, came along — but it was revolutionary. And so was a simple little law passed in 1990 to open the state to casinos — and picking of a different sort.
Let’s go ahead and do a drum roll and reveal the big number: State and local governments had relieved casino customers of $4,562,894,640.02 between June 1993, when the first state-licensed casino opened on the Mississippi Gulf Coast, through the last day of 2009.
Charlie Mitchell is executive editor of The Vicksburg Post. Write to him at Box 821668, Vicksburg, MS 39182, or e-mail.
Every penny is essentially “found money.” It’s the 12 percent cut taken by state and local governments when patrons buy chips for table games or slide money into slot machines.
The state funds and operates the Mississippi Gaming Commission and its staff of compliance and enforcement personnel, but has no other expense when it comes to casinos. No developer has gotten an “inducement package,” tax abatement or any other incentive.
And in addition to the $4.6 billion in revenue taxes, casinos have also paid hundreds of millions in local property taxes, hundreds of millions in employment taxes and collected hundreds of millions in sales taxes at their shops, restaurants, hotels and other amenities.
A few more numbers for perspective: During the fiscal year that ended last June 30, Mississippi collected $48 million on sales of liquor, $125 million on car tags, $289 million on gasoline sales and $360 million in casino taxes and fees.
Still, the most compelling aspect of this saga is how it came to be.
There were no studies. There were no review panels. There was not a word of public debate.
When the 1990 session of the Legislature adjourned its 90-day session, only a few members had any idea they’d voted on, passed and that Gov. Ray Mabus would sign a law that would lead to Las Vegas-style casinos in counties along the Mississippi River and Gulf of Mexico.
Some will always think there were nefarious back-room deals being made. Maybe there were, but the context of the times provides a credible explanation, too.
In 1990, there were two casino destinations in America — Nevada and Atlantic City. Louisiana had just started a state lottery and up the river in Iowa, gambling boats were being permitted to take day-trippers out on the Mississippi and let them play $5 blackjack and 25-cent slot machines. On the Mississippi coast, a ship called the Europa Star would also board passengers and take them out into international waters for a few hours of gambling.
Here in the buckle of the Bible Belt, Sen. Bob Dearing of Natchez introduced a bill designed to allow Europa Star/Iowa-style boats to operate from Natchez landing. It was something for tourists to do, you know. Any county on the river or coast that didn’t want such a business could say no thanks. No one saw it as a potential cash bonanza for the state.
With zero fanfare, the bill passed the House and Senate and went to a conference committee. A problem in Iowa was that operators cited bad weather, river stages and river traffic as limiting days when their boats could operate, making business unpredictable. So in conference here, language requiring boats to be “under weigh” was stripped out. The law still contemplated that operators would be small-time and offer excursions, but if the boats couldn’t go out, they could still operate “dockside.”
The final legislation, which still had required life preservers and licensed river pilots on “boats,” passed on voice votes — and casino developers took it from there. Within a few years, Mississippi had more square feet of casino space operating 24 hours a day than Atlantic City.
From a jobs perspective, casinos were a perfect fit for this state. Thousands of low-skilled workers got clerical, cleaning and maintenance jobs that paid decent wages. Welfare and Medicaid roles went down. Much of that has changed with automation by casinos, but the Mississippi Casino Operators Association still claims 38,000 direct and 28,000 indirect jobs at 29 state-licensed venues.
From a social perspective, there are plenty of stories of addiction and misery — but the fact that casino sites are still strictly limited has meant people who won’t want to see or think about casinos don’t have to.
From a governance perspective, it’s clear that every penny of that $4.6 billion has been spent and lawmakers yearn for more. No surprise there.
Twenty years later, however, casino development remains a remarkable story. Eli Whitney changed state history. So did the 1990 Legislature. Neither expected what followed.