Casino developers have to be discouraged. Las Vegas is overbuilt, Atlantic City's economy is a basketcase and voters in emerging markets like Chicago still can't decide whether to embrace gambling. But how about Biloxi, Miss., which is making a comeback in the wake of the twin ravages of Hurricane Katrina and the BP oil spill?
George Toth, whose long career in gaming has encompassed work for investors like Carl Icahn, is diving into the Biloxi market with unfettered enthusiasm. He's president and CEO of CanCan Development LLC, which is expected to gain municipal approval this spring for a massive $450 million complex in the town of D'Iberville, a stone's throw from Biloxi. Plans call for a casino, two hotels, a French-themed shopping center and even a 300-seat wedding chapel.
It will be the biggest thing to come along in years in greater Biloxi, where hotel capacity fell from 17,000 rooms before Katrina to 12,000 today. Other developers may not have noticed that Biloxi's hotels have filled to a healthy 85% of capacity recently and the gaming gross rose 8% over year-ago levels.
“This part of Mississippi was on its way to becoming the No. 2 gaming market in the U.S. before Katrina hit,” says Toth, 60. “It's No. 4 today, but it can still get to No. 2. We've got a temperate climate, golf courses all around and some of the lowest taxes anywhere..”
There have been snags over financing, but Toth lined up backers including Oppenheimer & Co. and Wells Fargo Bank. He hopes to begin construction on his 18-acre site by July and could open in 2013. With plenty of adjacent land available, he may even build a minor league baseball park.
The construction won't be cheap. The unstable ground near the beach requires a 20-foot thick base of concrete. The structures are being designed to withstand 175-mile per hour winds in case another Katrina hits land.
Earlier, Toth was CEO at the Mount Airy Casino Resort in Pennsylvania's Pocono Mountains, and before that he was president of the Sands Hotel and Casino in Atlantic City. He doesn't miss either. “The weather is better here and the tax on gaming receipts is just 12%. In Pennsylvania it's 60%,” Toth says. “There are a lot of reasons to like this place.”