What Do We Know After the Mississippi Supreme Court’s Ruling in RW Development?

Following Hurricane Katrina, the Mississippi Legislature amended the Mississippi Gaming Control Act to allow Mississippi Gulf Coast casinos to locate within 800 feet inland of a previous legal gaming site. Then, in December 2020 the Mississippi Supreme Court rendered an important opinion interpreting the legal site provisions of both the Mississippi Gaming Control Act and the Mississippi Gaming Commission regulations.

RW Development (RW) owns property at the intersection of Veterans Avenue and US Highway 90 in Biloxi, Mississippi. RW filed its first application for gaming site approval for the Veterans Avenue property in June 2008. The Mississippi Gaming Commission (Gaming Commission) denied approval, stating that the statute required an 800-foot measurement to commence from the “mean high water line,” which is where the water meets the shore, and not the toe of the seawall; that RW did not own and/or lease property to the shore; and that RW had not shown how the land extending to the south from its property to the mean high water line would be an integral part of the project as required by the Gaming Commission regulations. The Gaming Commission reaffirmed its previously stated position to not allow proposed gaming establishments to be located adjacent to public beaches. RW did not pursue an appeal of the denial. Continue Reading

2020 Regional Gaming Highlights

In late 2019, the Birmingham Race Course placed 301 historical horse racing machines at its facility. The machines, known as historical pari-mutuel betting, allow users to place wagers on horse races that have already taken place. The machines use historical information from previously run races, allowing bettors to pick the favorites or handicap for themselves. While issues pertaining to COVID-19 impacted and temporarily shut down operations at the facility after reopening, the Birmingham Race Course placed another 300 machines at the facility over the summer and has plans for even more. The Office of the Alabama Attorney General issued opinions in 2001 and 2008 that address the legality of pari-mutuel wagering in the context of computerized machines that replay historical horse races. Both opinions note that the Supreme Court of Alabama in 1971 determined pari-mutuel wagering is an activity involving skill, and that local laws in Mobile County and Birmingham permit pari-mutuel wagering, including televised horse racing events occurring elsewhere. The Attorney General’s Office has not, however, issued any formal opinions regarding the machines currently in use at the Birmingham Race Course and the technology employed by those machines or addressed how the evolution of Alabama’s law since 2008 may have impacted its prior opinions.

After the expansion of casino gaming and sports betting in 2019, Arkansas opened its third casino (out of a possible four), the Saracen Casino Resort, in Pine Bluff in October. Saracen features more than 2,000 slot machines and 30+ table games. The fourth casino license authorized by statute, in Pope County, has been awarded to Gulfside Casino Partnership. However, the second bidder on the license, the Cherokee Nation of Oklahoma, is currently pursuing litigation regarding the license, even as construction is ongoing. Organizers were collecting signatures for a constitutional referendum, the same mechanism used to expand sports betting in 2019, to expand the number of available casino licenses to 16, but withdrew the petition after a challenge by state election officials.

After a federal judge found designated player games violated a compact between the Seminole tribe and the state, in which the tribe agreed to pay approximately $350 million a year in exchange for the “exclusive” rights to operate banked card games, the Seminole tribe indicated it would stop the exclusivity payments to the state of Florida. While negotiations were ongoing through the legislative session and numerous parties close to the process indicated hope it would be resolved, the Legislature adjourned without any agreement in place. The tribe is continuing to withhold payments, and the current COVID-19-related budget crisis is increasing pressure on the state and legislators to find a resolution. As a possible benchmark for future discussions, sources involved in the negotiations held earlier in the year indicated the tribe may be granted exclusivity over gaming in exchange for potentially doubled annual payments. Continue Reading

2020 Mississippi Milestones

We took a deeper dive into Mississippi’s milestones throughout 2020 and have listed those highlights below.

UMUSIC Broadwater Hotel and Casino
Dakia Global U-Ventures and Universal Music Group announced a $1.2 billion resort to be built in Biloxi starting in 2021, with a target opening in 2023. The planned resort would have 1,150 hotel rooms, a 12,000-seat entertainment venue, and an 18-hole golf course.

Multi-State Draw Debut
Following the successful launch of the Mississippi Lottery in November 2019, the first multi-state draw games went on sale January 30 in Mississippi, with both Powerball and Mega Millions being available for purchase.

Lottery Success
After selling the first scratch-off tickets Thanksgiving weekend 2019, the Mississippi Lottery transferred more than $70 million to the state treasury by the end of the fiscal year, July 1, 2020. The authorizing statute requires that the first $80 million in every fiscal year will go to the State Highway Fund, but any amounts beyond $80 million will go to the Education Enhancement Fund. It is anticipated that lottery revenue will fund the Education Enhancement Fund in 2021 for the first time.

Scarlet Pearl Renovations
Amid coronavirus-related concerns and closings, the Scarlet Pearl has proceeded with its planned $30 million upgrade, most recently opening the Orchid Room, a high-limit gaming area.

Gross Gaming Revenue
While casino properties in the state were shut down for a significant time in the spring due to COVID-19, the reopenings in time for Memorial Day weekend led to an extremely strong recovery in gross gaming revenue, with July and August reporting more than 5% increases over a similar time frame in 2019. Overall, the pandemic continues to prove challenging to the Mississippi gaming market.

Eldorado Completes Purchase of Caesars
Eldorado Resorts completed the purchase of Caesars Entertainment on July 20, 2020, creating the largest gaming company in America. The merger was a $17.3 billion cash and stock deal. Following the transaction, El Dorado (now named Caesars) has five casinos in Mississippi — Harrah’s Gulf Coast in Biloxi, Horseshoe Casino in Tunica, Trop Casino in Greenville, Lady Luck in Vicksburg, and Isle of Capri in Lula.

Intense Hurricane Season
While the pandemic was challenging enough, 2020 brought one of the most active hurricane seasons on record, and the Mississippi gaming industry was not immune. Hurricane Zeta alone caused $50 million in damage to Gulf Coast casinos, in addition to the loss of gross gaming revenue during closures caused by the storm.

Mobile Sports Wagering
In December 2020, the Mississippi Senate Gaming Committee held hearings on the possibility of statewide mobile sports betting being made legal in the state. Will 2021 be the year?