Mississippi

New Developments (updated 8/31/00)

A newly drafted zoning ordinance would ban casinos in a certain area: The Mississippi Gaming Commission has drafted a zoning ordinance that would prohibit Back Bay casinos west of the Interstate 110 bridge.

The ordinance, which is scheduled for a public hearing on September 21 in Biloxi, would kill the Royal D'Iberville hotel-casino proposed by Las Vegas-based Coast Resorts. The company hopes to build a 300-room hotel and casino on nine acres adjacent to the west side of the bridge.

Chuck Patton, the gaming commission's executive director, said the agency had delayed drafting a zoning regulation for the Back Bay in anticipation of a proposal for a D'Iberville casino, but it decided to move forward after a federal court judge ruled on August 10 that Royal D'Iberville and two proposed casinos for the Bay of St. Louis would need to have environmental impact statements. "We think that project won't be going anywhere with the court ruling," Patton said.

Executives with Mandalay Bay Resorts of Las Vegas and Europa Cruises in Florida said they're proceeding with plans to build hotel-casinos on the Bay of St. Louis.

An expected earning tax increase could adversely affect Louisiana casino operations: With Louisiana widely expected to increase its already sizable 18.5 percent tax on gaming revenue, many casino company executives operating in Mississippi and neighboring Louisiana say such a move would only serve to enhance Mississippi's attractiveness as a venue for gaming operations while discouraging gaming companies from investing additional capital in their Louisiana operations, prompting them instead to expand their Mississippi dockside casinos and hotels. The local and state tax rate in Mississippi is 12 percent.

"Obviously, a tax increase will make it less attractive to increase your investment in Louisiana because it will erode your bottom line," said Jay Osman of Osman Holding Co. Inc. in Biloxi.

"Those companies that might have investment opportunities in Louisiana and Mississippi would look more favorable at the rate of return they would generate in Mississippi compared to Louisiana," said Chevis Swetman, president of The Peoples Bank of Biloxi. "You don't have to be a rocket scientist to figure that out. "

"Louisiana needs to learn from the state of Mississippi, which has done everything right compared to Louisiana, which has done everything wrong," Osman said. "It's very hard to make investment decisions in a climate where you don't know the rules or where the rules keep changing. "