Las Vegas on the Gulf Coast?

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JUSTIN SULLIVAN / GETTY

Workers dust off new slot machines at the Hollywood Casino August 28, 2006 in Bay St. Louis, Mississippi. As the Mississippi Gulf Coast struggles to rebuild after Hurricane Katrina, the Hollywood Casino is scheduled to reopen on August 31st, just over a year after it was destroyed.

All along the Gulf Coast, construction is driving the post-Katrina economic recovery, but the biggest and boldest bets in Mississippi are on gambling. Eight casinos are now open for business compared to 12 prior to Katrina, with more than 50,000 people employed either directly or in a support role. "By the end of this calendar year, the numbers will be pretty much where they were before Katrina," boasts Jerry St. Pé, head of the Mississippi Gaming Commission. The gaming haul has certainly helped the revival. In January, the three casinos up and running reported astonishing revenues — 65% of what all 12 coast casinos had reported pre-Katrina.

Immediately after Katrina, the odds on Mississippi's recovering at the gaming tables didn't look so good. Two days after the hurricane, St. Pé flew along the Mississippi coastline, surveying the devastation. Casino barges had been tossed ashore like toys, wrecking everything in their path — historic landmarks, businesses and homes. Buildings on the eastern end of Biloxi known as The Point, an area where immigrant fishermen settled in early 20th century when the city was known as the seafood capital of the world, were leveled. St. Pé's biggest fear was that the casinos, approved by the Mississippi Legislature in 1992, would flee, taking millions of dollars of revenue — including tax revenues that accounted for about 10% of the state's budget. "I realized on that flight that getting these casinos back up and running was key to our future, but the big question was whether or not the big players were willing to risk another hurricane," he says.

A week after Katrina, St. Pé flew to Las Vegas to meet with casino industry leaders, not expecting much, he admits. To his surprise, casino leaders felt differently. "The message I heard was that while the hurricane had inflicted tremendous physical damage, the major elements that had made Mississippi attractive for the entertainment and casino industry were still there," he says. But basing casinos on the water was looking like a bad bet, so the state moved quickly. In October, a special session of the Mississippi Legislature changed state laws to permit casinos to move 800 ft. inland, opening the way for gaming rooms to open inside casino hotels, most of which survived Katrina's tidal surge. "We knew the future of gaming in Mississippi, the future of our economic recovery, depended on the approval of land-based casinos," says St. Pé.

Within weeks of the shift ashore, new casino players like the Golden Nugget bought land in Biloxi for casino development. Harrah's Casino, owner of the destroyed Grand Casinos in Gulfport and Biloxi, sold its Gulfport location, moved everything to Biloxi and bought out a smaller casino for future expansion. And, the crown jewel of coast casinos — the huge Beau Rivage in Biloxi — announced a massive renovation beyond its Katrina damage. It plans to observe the one-year anniversary of the storm with a grand reopening to salute returning employees.

But the opening this week will be low-key, unlike a typical MGM Mirage grand opening, according to Bruce Nourse, vice president of public affairs for Beau Rivage. "That's because of the gravity of this day. We understand thousands of people's lives were changed, and for that reason we are not going to have fireworks and such. It will focus on the fact that we are putting 3,800 families back on their feet," says Nourse.

Katrina's tidal surge brought about four feet of water into the main public area of the casino, but the entire structure has been renovated and refreshed from top to bottom, said Nourse. Unlike other gambling barges, which rode the tidal waters, the Beau Rivage spent $25 million during initial construction to semi-submerge its barge, like offshore oil platforms. Because its barge was not moved by Katrina, it will continue to be used for gaming.

The $500 million renovation of the Beau Rivage by parent company, MGM Mirage, brings the company's total investment in Biloxi to more than $1 billion, says Nourse. He also credits Mississippi's approval of land-based gaming for helping to green-light their future plans for the area. "Every one's crystal ball here is somewhat cloudy, but with each passing month it's getting a little clearer," says Nourse. "You are seeing more and more interest in Mississippi by the big gaming players. Ultimately, I think it will mean fewer actual casinos in number but larger and more luxurious properties."

Already this month, three additional casinos have reopened their doors. The Grand Casino in Biloxi opened its 500-room hotel with a smaller version of a casino on its third floor. Definitely less lavish than its forerunner, the casino has its entrance on the third floor of the parking garage, but so many people flocked to the casino that patrons often waited up to an hour for their valet-parked cars. Three days after opening, few seats were available at slot machines, card tables or roulette wheels, and the line for the casino's popular buffet stretched well into the casino as patrons patiently waited to eat.

Local residents and business people are embracing the return of the casinos. More people died on Biloxi's Point during Katrina than at many other place in Mississippi as the storm leveled almost every building. Descendants of many of the early settlers banded together after the storm to sell large chunks of land in order to make more profitable deals with the gaming casinos.

Ocean Springs businesswoman Eleanor "Cissy" Jordan lost 45 rental houses and a commercial building, all bought on The Point by her grandfather, a Lebanese immigrant who came to Biloxi in 1926. Losing them wiped out 90% of her income. "The casinos are the only entertainment game in town for those of us who have been through so much emotionally over the past year," says Jordan.

Like many Biloxians, she often eats at casino buffets because Katrina destroyed the majority of the city's restaurants. "To see these casinos reopen with improvements and to know that more are on the way," she says, "is the biggest economic hope we have for the future."