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Louisiana Casinos May Be In for Better Days Despite Slide

Posted on September 23rd, 2010

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The two Gulf Coast states have recently seen an ironic reversal of fortune. Both Mississippi and Louisiana were affected by the oil spills of mid-2010, with the former province affected more in terms of the casino and entertainment industry because of their coast casinos. Louisiana, meanwhile, has been the subject of much rehabilitation and support, especially after Hurricane Katrina, compounded by the adverse effects of the oil spill. However, as casino figures for the last few months have revealed, Mississippi casinos, especially the ones on the Coast, have been especially thriving, while the ones in Louisiana have not escaped the downward trend present in almost all casino areas in the country.

The casinos licensed by the state in Louisiana have recorded another decline, albeit small, in their gambling revenue figures in August 2010 compared to figures of the same month a year ago. The casinos have been quick to point out the reason of the decline would be the fact that the downturn in the economy has forced their patrons to scrimp on gambling, and the casinos of the state are fighting each other for every dollar the player spends. The state hosts 18 gambling facilities all in all, including the casino in downtown New Orleans owned by Las Vegas-based industry giant Harrah’s Entertainment Inc., four “racinos” or race track casinos and 13 riverboat casinos. The combined winnings of these 18 facilities, last month totaled, as reported by the state police, $193.4 million, a decrease of 2.4 percent from the wins of August 2009 which reached $199.8 million.

Compared to figures of July 2010, the wins are way down by 11.9 percent. July 2010 reported the casinos winnings to reach $219.4 million. July has always been one of the busiest months in the casino industry, as the Independence Day weekend coincides with the peak of the summer season. But despite the small dip in August 2010 figures, industry insiders of the Louisiana scene, and even those across the country do agree that figures have been slowly picking up and are proving to be not as bad as their worst case projections. Year-to-year comparisons for the past months have always resulted into double figure percentage declines, and for the first time in months, these double-digit declines have been replaced by single-digit ones. For example, in the state where the US’ gambling capital is, July 2010 winnings posted a 4,9 percent decline compared to July 2009 figures. That’s quite a relief considering that most comparisons usually result in declines not less than 11 percent. In the July 2009 – July 2010 comparison, Mississippi casinos are inching their way to breaking even.

Some casino areas are not spared by the competition though. The Louisiana – Mississippi competition is a lot more mild compared to the battering Atlantic City gets from all corners of the New Jersey state borders. Year-to-year comparisons in New Jersey show that this year’s figures are 11.3 percent less from July 2009. Pennsylvania, during that month, introduced table games to their gaming facilities. New competition after Genting has been given the license to add machines to the Aqueduct race track of Queens, NY is set to bleed AC further. In the case of Louisiana, the only casinos that really pose serious completion to its 18 facilities are the ones in neighboring Mississippi. The new casinos operated by Indian nations in Oklahoma are also being challenged by a facility in Shreveport-Bossier City. Casinos in Florida are not really as much of a threat to Louisiana’s facilities as they are to Mississippi’s.

Cory Morowitz, an analyst for Morowitz Gaming Advisors LLC based in Galloway, NJ, said the worst days of the downturn may be over for the casino industry. He speculates, “The consumer is still not out of the woods. But retail sales have picked up so there’s a bit more spending. If there’s not a double-dip recession, we’ve probably seen the worst.” He adds that the plight of the national economy has a huge say on the state of the casino industry. He explains, “I think the economy is ready to expand, but it’s waiting for some clear signals out of Washington.”