Casinos behind economic recovery of New Orleans

A survey made by American Gaming Association revealed that legalized gambling represents one of the few industries which had an important contribution to the recovery of Mississippi and Louisiana after disastrous hurricanes Katrina and Rita smashed the Gulf Coast in the summer of 2005.

In order to find the opinion about the region's state of affairs the organization established in Washington, D.C. included in the research a wide category of citizens: from bank presidents to college professors, chamber of commerce directors and economic recovery experts.

A main part of the respondents, about 60 percent believed the Gulf Coast's current economic conditions were "very good" and 30 percent thought the conditions were "not so good” while 10 percent considered the economy in the region poor. On the other hand, a question about industries leading the recovery effort found 36 percent citing casinos and 23 percent citing construction.

Frank Fahrenkopf Jr., the President of American Gaming Association, declared that the survey indicates the significance of gambling industry in the process of recovery and the need to continue it.

In the Mississippi communities a lot of casinos were destroyed or heavily damaged by Hurricane Katrina on Aug. 29, 2005. Moreover, the destruction of Katrina shut down three casinos in the city and destroyed a fourth. But the damages didn’t stop there. A month later Rita, another violent storm, destroyed two casinos and damaged several others.

Ten casinos were renovated and opened on the Mississippi Gulf Coast and three of the four casinos in New Orleans have returned. Harrah's Entertainment closed two damaged casinos in Lake Charles and has plans to build a new casino in Biloxi.

Meanwhile, the gaming revenues in the region have constantly been increasing close to their levels before the storm. In 2004 the casinos on the region earned more than $1.22 billion from gamblers and in 2006 they earned $909.8 million.

Brian Sanderson, president of the Mississippi-based Gulf Coast Business Council, mentioned that the casinos were a strategic point for a good start of the economy. Additionally, he said that after the storm the efforts were focused on bringing back essential services to damaged communities, but now they are focusing on bringing other industries and businesses to the region.

Harrah's Chairman and CEO Gary Loveman, believes that affordable housing is the key concern in much of the region, especially for casino employees. Also, he mentioned that New Orleans needs to take steps to organize conventions, large events and other attractions to bring back visitors to the city.

For Harrah's New Orleans it seems to be a beneficial time. Before the storm, the casino, the largest in Louisiana, collected about 40 percent of revenues from residents while 60 percent came from regional and national visitors. Now, it generates about 80 percent of its revenues from the area's residents.