Mississippi’s casinos saw their combined gaming revenue plummet 48 percent in March as the statewide Covid-19 shutdown, now in its fifth week, continues to wreak havoc.
Larry Gregory, executive director of the Mississippi Gaming & Hospitality Association, described the loss as “a tough pill to swallow,” but promised the state gaming industry will survive.
Figures from the state gaming commission show the closure of casinos ordered on March 16 halted a revenue pace that had promised to be stellar. Instead, revenues topped out at $110.2 million, a steep fall from the $211.8 million the industry booked in March 2019. Last March was a banner month for all three of the state’s markets, thanks in large part to betting on the NCAA Men’s Basketball Tournament.
For a generation, gaming has been a major driver of Mississippi’s economy. Last year, the commercial casinos alone generated $2.2 billion in gaming revenues and another $818 million from non-gaming spend and drew more than 24 million visitors. According to the American Gaming Association, gaming’s contribution to the local government was nearly $1 billion, and its total economic impact was nearly $5 billion. That’s not even counting the three casinos owned by the Choctaw Indians.
As it stands now, most of the industry’s 16,500 employees are jobless. Taxes derived from gaming revenues will likely be down 36 percent or more in March, with April adding to the toll. Collections year-to-date have fallen by at least 12 percent.
“The virus is shaking the confidence of Mississippi consumers and the tourists who visit our properties,” Gregory told GGB News. “As we know from past experience, declines in visitation have a deep ripple effect across the broader community. The impact of the virus threatens the stability of the entire industry.”
Speaking solely of the effect on the state general fund, officials say a three-month closure will cost an estimated $35.7 million. In addition, sales and local taxes are taking an estimated hit of $4.5 million a week.
Looking at the bigger picture, a two-month shutdown will cost more than $730 million in lost economic activity, according to the AGA. In terms of the direct blow to the industry, March gaming revenue from the 12 casinos on the Gulf Coast was down 46 percent year-on-year; the Mississippi River market, home to seven casinos, was down 57 percent; and the Tunica market, home to seven casinos, was down 47 percent. Year-to-date, the Gulf Coast is down more than 14 percent; the Mississippi River market is down nearly 21 percent; and Tunica is down 20 percent.
In Tunica, where gaming revenue has been hammered by regional competition in recent years and thousands of jobs have disappeared, this month saw the industry’s first Covid casualty, with an announcement from Penn National Gaming that its Resorts Casino Tunica will be closing.
When the shutdown was first imposed, it was hoped casinos would be back in business by mid-April. A statewide shelter-in-place order was set to expire last week, before a spike in confirmed cases of the potentially deadly contagion, which has infected more than 3,600 people in the state and claimed more than 120 lives.
Governor Tate Reeves was scheduled to announce a decision about the shutdown order last Friday, but there was no word on when the casinos will reopen.
When that day arrives, and despite the long-term impact on gaming in the Magnolia State, Gregory said he’s confident the industry will still be standing.
“This hasn’t been our first rodeo in terms of closures due to disaster,” he told GGB. “We’ve dealt with the BP oil spill, Mississippi River flooding, and the most memorable, Hurricane Katrina.”
It’s a history of resilience which, for now, will have to do.
“We are coping, as most businesses are doing now,” Gregory said, “optimistic that one day this crisis will come to an end.”
