After Katrina

More than a month after Hurricane Katrina landed a devastating blow to the U.S. Gulf Coast, the region and the nation are still struggling with how to clean up, rebuild and move on from this disaster that has claimed hundreds of lives and the livelihoods of millions. Viewing pictures of the destruction these past weeks, we cannot help but feel overwhelmed, especially knowing that thousands of our industry’s employees have lost homes and loved ones and face an uncertain future.

Hurricane Katrina has had a truly devastating effect on our industry. As the seventh largest individual gaming market in the country, the 12 commercial casinos in Biloxi/Gulfport employed more than 14,000 people, and the newly constructed Hard Rock Casino would have provided jobs for nearly 2,000 more. Nearly all of those facilities were destroyed, and more than 10,000 employees lost their homes. And, while the gaming facilities themselves did not suffer nearly as much damage in New Orleans as along the Mississippi coast, a large number of gaming employees in that area also have lost homes and loved ones and, at press time, have yet to be able to return to the city they love.

Katrina is truly a national tragedy, and it is clearly one of the biggest challenges our industry has ever faced. However, the response of the industry to this devastating event has been significant thus far and will continue to mature as we move forward in the coming months. Many AGA member companies, whether or not they have been affected by this tragedy, have made sizeable contributions to organizations like the Red Cross and Salvation Army. They also have instituted employee fundraising and supply drives to assist relief efforts. The gaming companies affected by Katrina have gone above and beyond in creating individual assistance programs and emergency relief centers for their employees, establishing multi-million-dollar employee relief funds, as well as continuing to provide paychecks and benefits for their employees for several months after the storm.

The AGA also has created the Gaming Industry Katrina Relief Fund, which is raising additional industry dollars that will provide disaster relief and assistance directly to affected gaming employees in Mississippi and Louisiana. We already have received significant contributions from Argosy Gaming Company, Ameristar Casinos, Aztar Corp., Gaming Partners International, JCM American, MEI, Reed Exhibitions, Shuffle Master, Trump Casinos, Wynn Resorts and others, as well as several individual donors. More than $500,000 has been raised through these funds so far.

We are not naïve enough to think that $500,000 – or even several million dollars – can repair all the damage done by this storm or fully care for the tens of thousands of gaming employees affected by Katrina. But it is a start.

The industry’s primary focus in the first weeks after this disaster has been on locating and assisting our affected employees. The next big challenge will be the rebuilding process and the economic recovery of these communities.

From the gaming industry’s perspective, the economic recovery from the damage wrought by Hurricane Katrina has three key elements in the near term: the recovery of employees and their families; the rebuilding of damaged gaming facilities to restore business activity and employment in the region; and the reconstruction of infrastructure necessary for casinos to operate and employees and customers to safely travel to the casino.

As the voice of the commercial casino industry in Washington, the American Gaming Association (AGA) also is working with the U.S. congressional delegations from Mississippi and Louisiana on federal legislation to assist employees and businesses affected by Katrina. It appears Congress is using its post-9/11 relief packages for New York as a template for their response to the hurricane, and the AGA is advocating several recovery proposals in Congress, including incentives for employee relocation, unemployment insurance to fill the gap until reconstruction, federal housing assistance for displaced individuals and continued availability of casualty insurance on an affordable basis.

The AGA and its member companies also are working with state and local officials to ensure that full disaster relief benefits are available to displaced gaming employees despite whatever payroll benefits they may still be receiving, and to ensure the swift restoration of roads, bridges, utility systems and other infrastructure required for economic revitalization of the region. Gaming companies also will be closely watching for the Mississippi state legislature’s decision about whether to allow the Gulf Coast casinos to rebuild on land instead of over water.

The situation in Congress and along the Gulf Coast is rapidly evolving, and by the time this magazine is published, many of these proposals already will be in motion. One thing remains constant, however – the unwavering commitment of our industry to the employees and communities where we have had the pleasure of doing business for nearly 15 years. One of the unintended consequences of this disaster may in fact turn out to be positive: Rebuilding efforts in Mississippi could result in new gaming facilities that are more luxurious and boast a wider range of first-class non-gaming amenities than previously existed, helping attract more visitors and more complementary businesses to the region.

The Mississippi Gulf Coast is vital to our industry, and AGA member companies are committed to moving forward and to rebuild. It is unknown at this time how long it will take for full recovery – certainly months, if not years. But we as an industry are steadfast in our determination to rebuild as quickly as possible and reopen as quickly as makes sense. Our industry is incredibly strong and ready to face the next phase of this challenge. It is not a question of if the commercial casino industry will return to the Gulf Coast, but when.