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Indiana takes over third place in gambling revenue

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Mississippi, which has built much of its marketing for more than a decade around being the third largest gambling destination in the country, lost that title in 2009 to Indiana.

The state slipped to fourth place in terms of adjusted gross revenues from commercial gambling. In 2009, Mississippi reported $2.46 billion to Indiana's $2.58 billion. The numbers exclude charitable gambling and Native American casinos.

Mississippi casinos got roughly the same number of visitors in 2009 as they did the previous year, but people are spending less, said Beverly Martin, executive director of the Mississippi Casino Operators Association.

"The main thing was being the third largest destination gave us a great marketing tool—bragging rights, if you will," Martin said.

Convention and visitors bureaus are likely to continue touting Mississippi casinos as a reason to visit, but it won't have the same ring as being in the top three, Martin said.

Though Indiana has far fewer state-licensed casinos—13 to Mississippi's 30—it has a much larger demographic base to pull from with cities like Chicago and Indianapolis within driving distance of its properties.

Indiana had two new casinos open in 2008. And, in 2009, Penn National Gaming replaced the Argosy Casino, which opened in 1996, with a new $335 million Hollywood Casino. However, Mississippi officials believe the real reason Indiana moved up in the rankings had little to do with new casinos and more to do with outside factors affecting their competition, particularly a statewide smoking ban in Illinois.

"There's a lot more population in that part of the country," said Rep. Bobby Moak, D-Bogue Chitto, chairman of the House Gaming Committee. "I was a little bit concerned about it; looking at it, wondering what we did wrong. There was nothing in our control. There was nothing in the control of Indiana."

Indiana's reign may not last more than a year—it faces new competition from Ohio and possibly Kentucky—but industry watchers think other states, particularly Pennsylvania, may be poised to move up in the rankings.

Nevada and New Jersey continued to hold the top spots in 2009, reporting $9.76 billion and $3.9 billion, respectively. However, even their long-entrenched dominance, may be on shaky ground.

"What we're seeing is a changing of the guard now," said David Schwartz, director of the Center for Gaming Research in Las Vegas.

For about the last 10 to 15 years, there has been the Nevada, New Jersey, Mississippi hierarchy, Schwartz said. However, as the economy has gotten worse, more states have turned to gambling to fill budget gaps. The proliferation of casinos has affected the dominance of the old guard.

"People are gambling less, but they're doing it in more places," Schwartz said. "So that's why places like Las Vegas, Atlantic City and Mississippi have really been hit hard."

Every state in the country, except for Utah and Hawaii, has some sort of gambling—casinos, lotteries, pari-mutuel wagering or charitable gambling, according to the American Gaming Association.

Everyone has gambling now, said Roger Gros, publisher of Global Gaming Business Magazine.

Atlantic City has seen its market shrink by 25 percent in the last few years, Gros said. It stands to lose even more of its share now that Pennsylvania is poised to add table games to its slot-based casinos. Tunica, meanwhile, has been hurt by the Oklahoma market, which has taken people out of Texas who otherwise might have gone to northwest Mississippi.

Gambling itself is not the draw it once was to get people to these markets, Gros said.

"They're going to need a lot more than that," he said. "Non-gaming amenities has been a buzz word in the industry for the last five years, but now it's crucial."

Mississippi, particularly the Gulf Coast, needs to recreate itself now, rather than later, Gros said. That means adding the types of attractions people look for in any travel destination—restaurants, retail shops, outdoor recreation, non-casino entertainment.

Florida is looking to add commercial casinos to the Native American gambling that already exists, and that could create huge problems for the coast casinos, Gros said.

"Atlantic City didn't think about it in advance, and is now struggling to stay on top," he said. "Mississippi still has time."

Even with its fall to fourth, Mississippi remains focused on knocking the Jersey Shore from its number two spot, Moak said.

The state has a steady tax rate, a stable casino market and no restrictions on the number of casino licenses it can issue, which gives Mississippi a pro-business approach to gambling, he said.

"Mississippi says, if you have the money and you want to take a shot, come to Mississippi," Moak said. "I think that's why we'll see, even in the bad times, a little bit of growth in our market. Because the industry believes in our market."

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