Mississippi Governor Signs Katrina Casino Legislation

Floating casinos that were devastated by Hurricane Katrina (search) can be rebuilt on solid ground under legislation signed Monday by Gov. Haley Barbour (search) that could lead to major changes in the tourism industry along the Mississippi Gulf Coast.

All 13 hotel-casinos on the Mississippi coast were damaged or destroyed when Katrina slammed ashore Aug. 29 with killer winds and a storm surge that tore the walls off many gambling houses and tossed some of the massive barges on land.

The new law, approved during a special legislative session that ended earlier this month, allows the casinos to build up to 800 feet inland. Previously, religious conservatives had fought successfully to keep the casinos off dry land.

"This bill is about more than gaming," Barbour said in a statement. "By signing this bill, the state is taking the necessary precautions to provide safety for the casinos and, in turn, is providing jobs for thousands of displaced Mississippi workers."

The state legalized casinos in 1990 but restricted them to the waters of the Mississippi River and the Gulf of Mexico. The new law does not affect river casinos.

"We are taking the first few steps to accomplish this by focusing on rebuilding south Mississippi and the Gulf Coast bigger and better than ever," the governor said.

About 14,000 people worked for the coast casinos before Katrina. Area business leaders say thousands more people worked in related jobs — distributing everything from beer to seafood to hand soap.

The old law requiring casinos on barges handicapped Mississippi casinos from the start, as the big gambling companies never could construct anything grand enough to rival Las Vegas, Atlantic City or even large reservation casinos.

Hurricane Katrina has given casinos a chance to rebuild as megaresorts — with more entertainment, shopping and dining options — perhaps turning the Mississippi coast into a national tourist destination.

"I think one of the more significant advantages of this disastrous, miserable event is the fact that you're going to have much more exciting resorts developed that will attract more people," said Terry Lanni, chairman of MGM Mirage Inc. (search), which owns the Beau Rivage in Biloxi.

Some casino companies haven't announced their plans publicly, but others have hinted that they intend to invest a lot more than $100 million — the value of some of the casino barges that were washed across U.S. 90.

Harrah's Entertainment Inc., the world's largest gambling company, has already said it will construct a "very impressive" hotel-casino in Biloxi. So far, it has not committed to resurrecting its Gulfport resort, a signal that the company could put its vast resources into a one major property.

Bigger casinos and hotels with high-quality entertainment would draw some visitors — especially those from the South — who normally go to Las Vegas.

Montgomery, Ala., residents Johnnie Early, 69, and John Bitter, 76, went to Las Vegas last year, but said they would welcome bigger and better casinos in the next state over.

"It's a lot cheaper to go there (Mississippi), but I would want really big casinos that have the big brand shows so that it's not just gambling," Early said.

Biloxi has a long way to catch up with the top gambling markets. Last year, Nevada generated $11 billion in gambling revenues, with the bulk coming from Las Vegas. Atlantic City had $4.8 billion and Mississippi $2.7 billion.

Larry Gregory, executive director of the Mississippi Gaming Commission, said he believes Mississippi could rival Atlantic City in the coming years. But not everyone agrees.

"We don't see a market anywhere close to Atlantic City, however, given the obvious population disparity in each's feeder markets," said John Mulkey, a gambling analyst with Wachovia Securities.