The Effects of Casino Gaming on Tunica County, Mississippi · PDF file2 THE EFFECTS OF CASINO...

The Effects ofCasino Gaming on

Tunica County, MississippiA case study 1992-1997

James Thomas Snyder

Social Science Research CenterSeptember 1999

Social Research Report Series 99-2

Arthur G. Cosby, Director

Robert Altenkirch, Vice President

Malcolm Portera, President

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The Effectsof

Casino Gamingon

Tunica County, Mississippi_________________

A case study 1992-1997by

James Thomas Snyder *

Casino gaming is one of the largest and fastest-growing industries in America. Ithas grown ten-fold since 1975, with casinos in 28 states compared to just two20 years ago.1 In 1997, Americans spent $26.3 billion on casino gaming, almost

12 percent of the nation’s total entertainment spending.2 The gaming market has grownwithout slowing, and appears ready to expand into the foreseeable future.3

Consequently, gaming has drawn a great deal of attention, from development ana-lysts to academics, moral crusaders, and legislators. They all pose questions about theimpacts of a little-studied industry, embraced by mostly poor communities as tools fordevelopment, that hardly existed just ten years ago. With such questions in mind, theU.S. Congress created the National Gambling Impact Study Commission in 1996 to col-lect information on gambling and make recommendations about future policy.4

The commission agreed on a number of recommendations. It counseled “consider[ationof] a pause in the expansion of gambling,” increased federal and state regulation and

* B.A., University of California, Los Angeles, 1995. J.D., Washington College of Law, M.A., School ofInternational Service, American University, 2001. I wish to thank Professor Art Cosby of Mississippi StateUniversity, Professor David Ciscel of the University of Memphis, and Jane Dabel of the University ofCalifornia, Los Angeles, for their professional support. Many thanks to John Hubbell, Craig Brewer, JasonSnyder and Lorelei Schweickert for their moral support and encouragement during this lengthy project.Lastly, I wish to thank Kathleen Dombhart Bark of The Daily News in Memphis, without whose initialsupport in 1995 this subject may never have been investigated.

1 National Gambling Impact Study Commission (NGISC), June 3, 1999, Executive Summary, p. 3.

2 Gross Annual Wager, International Gambling and Wagering Business Magazine, Aug. 1998, cited inNGISC Executive Summary, p. 4.

3 “[T]here is no end in sight: Every prediction that the gambling market was becoming saturated hasproven to be premature.” NGISC Final Report, June 1999, p. 1-1.

4 National Gambling Impact Study Commission Act, Pub. L. No. 104-169. For commentary, see JamesSnyder, “Casino County” in The New York Times, July 24, 1996, p. A-15.

THE EFFECTS OF CASINO GAMING ON TUNICA COUNTY, MS2

oversight, restriction of expansion of certain kindsof gambling, and continued study on the industry’sbenefits and detriments.5 The report imparts anuneasiness with gaming since it became a social andeconomic force nationwide, urging future study dur-ing the recommended pause.6 It also reflects a moraltone adopted by gaming’s opponents. In the South,in particular, gaming’s most outspoken opponentshave been religious conservatives.7 Such uneaseand moral tenor have converged on the darker as-pects of gambling behavior, involving the adverseimpact of gambling on the poor—who gamble most—and growing evidence of addictive or pathologicalgambling.8

This survey, whose antecedents precede the com-mission by only months, attempts to augment thecommission’s macro survey with a microeconomic onewhile following its call for further research. As thecommission noted, studies have missed a perhapscrucial nexus of political economy that can explainboth the gaming phenomenon and its communityimpact.9 Because gaming is a matter of state ac-

tion—that is, legalization—from the state to the mu-nicipal level, the communities have a choice aboutgaming, more so than with any other type of indus-try. The choice to allow gaming is a very democraticone.10 For the poorest communities, legalizing gam-ing can be a matter of poverty or prosperity. 11 Morespecifically, these communities welcome gaming asa development tool. It is only fair, then, to deter-mine the success of that effort.

TUNICA COUNTY

Nowhere are the contrasts of this choice greaterthan in Tunica County, Mississippi. This abjectlyimpoverished former cotton county running along theMississippi River in the northeast corner of the statejust south of Memphis was at one time consideredthe poorest county in America. Per capita income in1990 was $6,500 for a single person and $11,000 fora family of four.12 Unemployment, which peaked inthe 20 percent range in the 1980s, was 13.1 percentin 1990.13 Federal assistance provided for half thepopulation of about 8,000 residents.14 Poverty was

5 NGISC Final Report, June 1999, p. 1-7 and Chapters 3 and 7.

6 “[A]ll agree that the country has gone very far very fast regarding an activity the consequences of which, frankly, no one reallyknows much about.” NGISC Final Report, June 1999, p. 1-7.

7 Edward Walsh, “Two Sides of Casinos’ Coin” in The Washington Post, July 12, 1998, p. 1.

8 See special series in The Commercial Appeal (Memphis), by Laurel Campbell and Bartholomew Sullivan, October 1997. See alsoMatea Gold, David Ferrell, “Going for Broke” series in the Los Angeles Times, Dec. 13, 1998. The NGISC Final Report, June 1999,devotes an entire chapter on problem and pathological gambling, quoting extensively from the work of Rachel A. Volberg. SeeRachel A. Volberg, “Gambling and Problem Gambling in Mississippi,” Report to the Mississippi Council on Compulsive Gambling,January 1997, Social Science Research Center, Mississippi State University, Social Research Report Series 97-1.

9 “Virtually every aspect of legalized gambling is shaped by government decisions. Yet, virtually no state has conformed its deci-sions in this area to any overall plan, or even to its stated objectives. Instead, in almost every state whatever policy exists towardgambling is more a collection of incremental and disconnected decisions than the result of deliberate purpose.” NGISC FinalReport, June 1999, p. 1-7.

10 For example, Arkansas defeated two voter referendums to allow casino gambling in the state, and defeated six attempts to amendthe state constitution in two years, joining only six other states in doing so. Joan Duffey, “Backers of Ark. Casino Plan Say ProfitsWill Stay at Home,” in The Commercial Appeal (Memphis), September 18, 1997. New Jersey has restricted casino gambling toAtlantic City, creating the so-called “New Jersey” casino development model. NGSIC Final Report, June 1999, p. 3-6.

11 “Atlantic City would be dead without casino gambling.” Atlantic City Mayor James Whelan, NGISC Final Report, p. 7-6.

12 USA Counties 1996 CD-ROM, U.S. Bureau of the Census.

13 Population Estimates Program, Population Division, U.S. Bureau of the Census.

14 Mississippi Department of Human Services.

SOCIAL RESEARCH REPORT SERIES 99-2 3

Gaming RevenueTunica County, Mississippi, FY 1993-1997

Figure 1a

Source: Tunica County Comptroller

so endemic that the country was shocked by a 1987visit of the Rev. Jesse Jackson to Sugar Ditch, anappalling collection of lean-to shacks abutting anopen sewer. During the height of concern about fam-ine and poverty in east Africa, Jackson labeled Tu-nica “America’s Ethiopia.” It has become a well-wornrefrain.

It was by rational choice, then, that the commu-nity permitted the establishment of dock side gam-bling in 199215 in order to inject revenue, growth,and income into a moribund and isolated commu-nity. All other attempts at economic developmenthad failed. As the Tunica County Administratorstated the day the largest casino outside of Nevada

opened in Tunica County, “It was born more out ofdesperation than some stroke of genius that weturned to this industry to build our economy.”16

The decision certainly looks like a stroke of ge-nius. Tunica is now the third largest gaming mar-ket in the country, with 10 casinos and 17.4 millionvisitors in 1997. Gross casino revenues are $933.3million, accounting for 47 percent of the gaming mar-ket in Mississippi.17 Tunica’s gaming tax revenuegrew from $913,000 in 1993 to $32.5 million in 1997(See Figure 1a), a 35-fold increase. By contrast, Mis-sissippi took in $233.6 million in 1997 gaming taxrevenue, a five-fold increase over 1993 (See Figure1b).

Gaming RevenueMississippi Totals, FY 1993-1998

Figure 1b

* No data available for 1993-1995Source: Mississippi State Tax Commission

$0

$5

$10

$15

$20

$25

$30

$35

'97'96'95'94'93

Millions

$0

$50

$100

$150

$200

$250

$300

'98'97'96'95'94'93

Millions

Transfer to Local Government

Bond Sinking Fund*

General Fund Transfer

15 Mississippi broadly legalized gambling in 1990. Miss. Code Ann. § 97-33-1 (Supp. 1998). Mississippi’s statute legalizes gaming,but it is up to the individual counties to allow casinos. Miss. Code Ann. § 19-3-79 (Supp. 1998).

16 Interview with Ken Murphree, in James Snyder, “Why Tunica Matters: Pros, Cons in Debate” in The Daily News (Memphis),June 26, 1996, p. 1.

17 NGSIC Final Report, June 1999, p. 2-6.


Population GrowthTunica, Tate and DeSoto Counties, Mississippi,

FY 1993-1997

Figure 2

Source: Population Estimates Program, U.S. Bureau of Census

Since Tunica invited gaming by rational choice,it is only reasonable to study what has happenedthere as a case study of what gaming can or cannotdo for a community. This is closer to themicroeconomic survey needed to understand compre-hensively the effect of gaming on the communitieschoosing to embrace the industry.

METHOD

Readily-available governmental statistical infor-mation provides the quantitative basis of this sur-vey. The changes over time and the causes and ef-fects are discussed based on interviews with localofficials. In the following discussion, there are twoways to interpret these numbers. The first is to takethem as isolated, to see what Tunica’s casinos havedone to, for, and in Tunica. The other is to comparegrowth rates to the state or neighboring counties tosee what can be learned. Both are valid and neces-sary. For what is happening on the ground in Tu-nica is a direct result of a policy decision the com-munity made for itself. On the other hand, a basisof comparison helps wring out other impacts whilesuggesting alternate models for development.

For comparison’s sake, the case study also ex-amines a similar timeline for neighboring Tate andDeSoto Counties. Tate and Tunica generally mirroreach other, with similar demographics. DeSoto, how-ever, is a much larger and growing suburb of Mem-phis. Neither Tate nor DeSoto have gambling, butthe trickle-over effect is felt in both counties.

POPULATION GROWTH (Figure 2)

Population is a general indicator of an area’s eco-nomic vitality.18 Despite rapid economic growth andopportunity, Tunica’s population has stagnated dur-ing the 1990s. If people are attracted by jobs, theytend to move there. If there is little opportunity,

they tend to leave. The Memphis Metropolitan Sta-tistical Area (MMSA) is a fast-growing region. Tu-nica, however, is not considered a suburb of Mem-phis.

Mississippi’s population has grown slowly formost of the century, with a drop due to massive out-migration from 1940-1960.19 Tunica’s population bycontrast has stagnated in the 1990s, following a con-tinuing decline from a high in this century of 22,610in 1940. From 9,652 in 1980, the population hadplunged to 8,134 in 1990. The advent of gamblinghas not had any particular effect of attracting resi-dents. The population peak during the 1990s was8,218 in 1994, a year after the casinos moved in. Butit has remained in that range for almost a decade.

0

20,000

40,000

60,000

80,000

100,000

'97'96'95'94'93'92'91'90

Tunica County

Tate County

DeSoto County

Person

18 NGISC Final Report, June 1999, quotes economic John Kenneth Galbraith: “People are the common denominator of progress.”

19 All figures in this section, U.S. Bureau of the Census.


By contrast, Tate County showed slow but con-sistent growth since 1990, from 21,438 to 23,570 in1997. DeSoto County, by contrast, grew by 20 per-cent from 1990 to 1997, with strong consistent growthfrom 68,594 to 92,019.

Reasons for this disparity vary. By and large,the quality of life could not meet the massive infu-sion of economic activity in Tunica. In 1992, schoolswere mired in poor performance (see School TestScores section), and the county had no hospital, bookstore, or movie theater. Moreover, there was liter-ally no place to live. Only well after the casinosmoved in did residential construction begin to in-crease (see Residential Construction section). Un-fortunately, three other major influences adverselyimpacted the housing market.20 First, the presenceof casinos drove the price of formerly depleted farm-land up from $1,000-$5,000 per parcel to $25,000 or$50,000.21 Second, by state law, there was no county-wide sewer and water authority—developers had toprovide their own water and sewer, or contract fromthe casinos at rates up to six times higher than inneighboring Memphis.22 Finally, the county lackedcoordinated emergency services, which pushed fireinsurance rates to a premium.23 Such problems didnot occur in neighboring communities; it was easierfor workers relocating to Tunica to live outside ofthe county.

EMPLOYMENT, LABOR FORCEand UNEMPLOYMENT(Figures 3a-c)

Another basic measure of economic vitality is theactivity of the labor market. A seemingly unmitigatedsuccess is that the Tunica unemployment rate wascut in half since the advent of the casinos. From apeak of 15.9 percent in 1989, the unemployment rateplunged to 7.2 percent in 1997.24 But despite this

Unemployment RateTunica, Tate and DeSoto Counties, Mississippi,

FY 1988-1997

Figure 3a

Source: Mississippi Employment Security Commission

0%

5%

10%

15%

20%

'97'96'95'94'93'92'91'90'89'88

Tunica County

Tate County

DeSoto County

20 Interviews with Chris Watson, director of the Tunica County Planning Commission, and Vince Smith, developer of RiverChaseApartments, Robinsonville, in James Snyder, “Tunica population flat as casinos grow” in The Daily News (Memphis), June 3, 1996.

21 County real estate values exploded from $136.6 million in 1992 to $434.5 million in 1997. From “A Splash set off a tidal wave—Tunica’s rolling” in The Commercial Appeal series.

22 Water and sewer rates compared by rates of Memphis Light, Gas & Water to records filed with Mississippi Public ServiceCommission. From James Snyder, “Tunica population flat as casinos grow” in The Daily News.

23 Interview with Chris Watson in ibid.

24 All figures in this section, Mississippi Unemployment Security Commission.


overall good news, there are three attributes of un-employment in Tunica to note.

First, while the unemployment rate had col-lapsed, the number of people unemployed was aboutthe same in 1997 as it was a decade ago. In 1988,the number of unemployed in the county was 420,and in 1997 it was 410, with a peak of 640 in 1995.

Secondly, integrally related to the unemploymentrate is the civilian labor force—those with jobs oractively seeking work—which expanded dramaticallysince 1988, from 2,760 to 5,710 in 1997.

The third is a result of this confluence: unem-ployment in Tunica was volatile based on the boom-and-bust nature of several casinos and their subse-quent relocation. In 1993, a cluster of four casinos

opened in Mhoon Landing, near Tunica town, in thesouthern part of the county. By 1995, however, twohad closed and two others relocated to Robinsonville,in the north part of the county, closer to the primarymarket of Memphis. Not only did the closures dis-rupt the employment situation, it made employmentmore difficult. In a mostly poor, rural county, theproximity of work is very important.25 It took sometime for workers to find transportation 15 miles northof where their original work had been.

Curiously, Tate and DeSoto counties had thesame unemployment pattern, though it appears moresubdued. A reason for this may be that the sameemployment effects were felt in neighboring commu-nities or it may have followed the same fluctuationin agricultural employment.26

Civilian Labor ForceTunica, Tate and DeSoto Counties, Mississippi,

FY 1988-1997

Figure 3b

Source: Mississippi Employment Security Commission

0

10,000

20,000

30,000

40,000

50,000

'97'96'95'94'93'92'91'90'89'88

Tunica County

Tate County

DeSoto County

UnemployedTunica, Tate and DeSoto Counties, Mississippi,

FY 1988-1997

Figure 3c

Source: Mississippi Unemployment Security Commission

0

500

1,000

1,500

2,000

2,500

'97'96'95'94'93'92'91'90'89'88

Tunica County

Tate County

DeSoto County

Person

25 Interview with Rayford Crews, chief of labor market information, Mississippi Employment Security Commission in “Unemploy-ment rate up after casino debut” in The Daily News (Memphis), June 5, 1996, p. 1.

26 Ibid.


AFDC/TANF and FOOD STAMPS(Figures 4a-b)

A third vital economic indicator is the level offederal entitlement aid flowing to an area. New jobgrowth and economic opportunity dramatically cutTunica’s federal income assistance rates. As notedat the outset, Tunica’s poverty mired as many as halfof its residents in federal income assistance programsas late as 1990. As far as those rates are concerned,the casinos created an unqualified success. FoodStamp use was cut by more than half, from 53.8 per-cent in 1991 to 24.2 percent in 1997, with a consis-tent decline in between. Aid to Families with De-pendent Children (Temporary Aid to Needy Fami-lies [TANF] replaced AFDC following the 1994 wel-fare reform initiative) saw an even greater rate ofdecline, from 22.2 percent in 1991 to 6.6 percent in1997.27 It is safe to assume that with the new jobs

generated by the gaming industry, most families hadsomeone working and providing.

The decline was too dramatic to be attributed toany other cause, despite the coincidence of an over-all improving economy following the 1989-91 reces-sion and the 1994 welfare reform. Drops in the stateand neighboring counties were not nearly as large.The most dramatic drops occurred after the casinosmoved in, between 1993 and 1994. Likewise, thewelfare reform that resulted—TANF—appears tohave had minimal effect. The state, in fact, openedup a casino-oriented training class in 1996, directlyfeeding newly trained workers into the casinos.28 Ifanything, welfare reform encouraged the pattern to-ward employment at the casinos. New programsopened in the area to prepare former welfare recipi-ents for work, and working wages required droppingfrom the welfare roles.

Welfare Recipients (AFDC/TANF)Tunica, Tate, DeSoto Counties, and State,

FY 1991-1997

Figure 4a

Source: Mississippi Department of Human Services

0

5

10

15

20

25

'97'96'95'94'93'92'91

% of Population

Mississippi

Tunica County

Tate County

DeSoto County

Food Stamp RecipientsTunica, Tate, DeSoto Counties, and State,

FY 1991-1997

Figure 4b

Source: Mississippi Department of Human Services

0

10

20

30

40

50

60

'97'96'95'94'93'92'91

% of Population

Mississippi

Tunica County

Tate County

DeSoto County

27 All figures in this section, Mississippi Department of Human Services.

28 Interview with Ruby Danridge, personnel development specialist, Northwest Mississippi Community College in “Welfare, foodstamp use down with casinos” in The Daily News (Memphis), June 7, 1996, p. 16.


Norm-Referenced Assessment Scores9th Grade Aggregate for Mississippi and Tunica,

Tate, and DeSoto Counties, 1994-1997

Figure 5

SCHOOL TEST SCORES(Figure 5)

The effect of casino tax revenue influx on Tunica’sschools and student performance is inconclusive. In1990, the Tunica public schools seriouslyunderperformed compared to other counties andstate averages. They lacked in capital resources,spent less per-student than any other county, andhad among the lowest test scores in the state. Butthe casinos infused a cash windfall most school dis-tricts in the country could only dream of: more than$3.2 million in FY 1997 alone.29 While school im-provement in a community with a stagnant popula-tion was slow—only five years had passed since thecasinos appeared—Tunica’s experience indicatedthat more was needed than money. The county schoolsystem is still under control of the state.30

The main testing apparatus in Mississippi is theNorm Referenced Assessment (NRT), which testsstudents in reading, language, and math from the4th through the 9th grade.31 In the case of Figure 5,the numbers indicate percentages of students per-forming below the state average. Negative activity,then, counts for improvement. One problem withthe NRT is its complexity: it measures progressacross grades and classes, which are not easily con-densed. In the random selection of 9th grade perfor-mance, Tunica had improved, but that was not thecase in the same time period with other grades. Aserious problem evaluating the NRT was that thestate instituted it in 1994, and it was not compa-rable to the previous test battery, the Stanford SAT8. Nonetheless, based on the 9th grade scores, Tu-nica performed as steadily as the state average,which showed consistent improvement. DeSoto andTate counties also showed constant improvement.Especially given the small sample of students in theTunica school district, it may be too problematic tocompare these scores.

Another indicator of student performance is ACTscores, the standard college-entrance exam for stateuniversities in Mississippi. Unfortunately, therewere a number of problems in evaluating these scoresand, therefore, they are not included here. The ACTis an alternative to the Scholastic Aptitude Test,which is used in virtually every other state. Thestate Department of Education carries some ACTscores back to 1990, but not others. The state hasbeen inconsistent in reporting the test score aggre-gates. Again, in the case of Tunica, the sample wasvery small— varying from a low of 25 students whotook the exam in 1995 to a peak of 47 in 1997.

Note: declining scores indicate improvementSource: Mississippi Department of Education

10

20

30

40

50

60

'97'96'95'94

Mississippi

Tunica County

Tate County

DeSoto County

29 Based on 10 percent collection for schools of $32,509,104 collected. Tunica County Comptroller.

30 Bartholomew Sullivan, “State Overseers Check Progress of Tunica Schools,” in The Commercial Appeal, December 11, 1998.

31 All figures in this section, Mississippi Department of Education.


Given the inconsistency of the data, anecdotalevidence may substitute. In an impoverished com-munity, higher education is often the only way outof poverty. But with the presence of ready employ-ment for bright high school graduates, the incentiveto go to college diminishes. School administratorsstated that not only did graduates rush off to thecasinos, many of them already worked part-time atthe casinos while they were still in school. It is apeculiar irony that casinos would encourage a short-term gain over long-term security.32

Due to the complex and inconsistent data, thisclearly remains an area for further detailed study(see Other Issues and Recommendations for FurtherStudy).

RETAIL SALES and COMMERCIALCONSTRUCTION(Figures 6a-b)

Retail sales and commercial construction sky-rocketed following casino development, but most ofthat increase could be attributed directly to the ca-sinos themselves, with little secondary impact. Amain argument against casinos is that they attractcustomers from locally-owned businesses. Industryofficials argue, of course, that casinos attract peoplewho would not usually frequent local establishments.Here, unfortunately, the numbers and comparisonsdo not speak definitively of what happened in Tu-nica. Retail sales rose dramatically, but the mass ofthat increase was attributed directly to casinos. Sec-ondary development occurred, but it looked modestespecially in comparison to DeSoto’s growth. Num-bers for business closures were not available. Manyin the county worried that the relocation of the main

casinos from Mhoon Landing, near Tunica town atthe south end of the county, to Robinsonville 15 milesnorth and closer to Memphis, left the population cen-ter out of the benefits of economic development, withlocals closing down and chain stores, fast food shops,and gas stations replacing them.33 In any given yearfrom the start of the gaming boom in 1990, casino-related construction amounted to a third of construc-tion permits. But note the comparison of Tunica toDeSoto, where a mixed economy showed steadygrowth in retail sales since 1990.34

Retail SalesTunica, Tate and DeSoto Counties, Mississippi,

FY 1990-1997

Figure 6a

Source: Mississippi State Tax Commission

$0

$200

$400

$600

$800

$1,000

'97'96'95'94'93'92'91'90

Tunica County

Tate County

DeSoto County

Millions

32 Interview with Susie Hardaman, Rosa Fort High School, and John Learned, human resources director, Fitzgerald’s Casino, in“Tunica high schoolers in casino squeeze play,” in The Daily News (Memphis), June 10, 1996.

33 “The lumber yard’s closed. The hardware store’s closed. The tavern. The café. The service station. Western Auto’s closed. Youcan go through the streets of Tunica and see the empty storefront. The casinos have dried up the available dollars.” Interview withJim Phillips in “A Splash set off a tidal wave—Tunica’s rolling” in The Commercial Appeal series.

34 Retails sales, Mississippi State Tax Commission. Commercial construction, Building Permits Branch, Construction StatisticsDivision, U.S. Department of Commerce.


Commercial construction, as based on commer-cial permits, showed a strong upward trend follow-ing the 1992 introduction of casinos in Tunica. It isagain likely the trend in Tunica alone was based oncasino and hotel construction. This does not, how-ever, explain the incredible growth of commercialconstruction in neighboring DeSoto County. Unfor-tunately, the state stopped collecting this data in1994, with only commercial ventures available to sellthis data. This is another area for further study.

RESIDENTIAL CONSTRUCTION(Figures 7a-c)

As argued earlier, a major impediment to natu-ral growth and development in Tunica was the lackof actual places to live. As can seen by a comparisonof Figures 7a-c, Tunica residential construction onlybegan in earnest in 1995. Nevertheless, the com-parison to neighboring Tate is telling, with a similarincrease in units built, but generally slow growth.DeSoto, on the other hand, had strong and consis-tent growth since 1991.35 This sharply contrastsTunica’s level population growth.

Residential ConstructionTunica County, Mississippi,

FY 1990-1997

Figure 7a

Source: U.S. Department of Commerce

Number of Residential Construction Permits

0

50

100

150

200

'97'96'95'94'93'92'91'90

Units

Buildings

Commercial ConstructionTunica, Tate and DeSoto Counties, Mississippi,

FY 1990-1997

Figure 6b

* Excluding alternations or garagesSource: U.S. Department of Commerce, Construction Statistics Division

0

30

60

90

120

150

'94'93'92'91'90

Tunica County

Tate County

DeSoto County

Number of Construction Permits*

35 Ibid.


Figure 7b


Residential ConstructionTate County, Mississippi,

FY 1990-1997

Residential ConstructionDeSoto County, Mississippi,

FY 1990-1997

Figure 7c


Bankruptcies (Figure 8) are a crude economicyardstick, but they are invariably invoked in thedebate over gaming by both supporters and oppo-nents. A strong link exists between bankruptciesand pathological gambling.36 However, gaming ad-vocates argue that bankruptcies are not affected bygaming, and may even lead to their decline with thepromise of jobs and revenue.37

Bankruptcies are difficult to judge because theyreact sluggishly to the rest of the economy. It is dif-

ficult to determine, then, the true impact of gamingin Tunica on the regional market it feeds beyondanecdotal evidence. The number of bankruptciessteadily rose in Northern Mississippi, Western Ten-nessee, and Eastern Arkansas from 1990 to 1997.However, the general increase could be associatedwith the steady increase in bankruptcies nationwide,probably in reaction to the expanding economy. Theregion benefited from a growing economy, particu-larly in Western Tennessee, with unprecedented eco-nomic growth in the Memphis MSA.


5,00

1,000

1,500

2,000

2,500

3,000

'97'96'95'94'93'92'91'90

Units

Buildings


50

100

150

200

250

'97'96'95'94'93'92'91'90

Units

Buildings

36 NGISC Final Report, June 1999, p. 7-16.

37 This was the assertion in an American Gaming Association pamphlet, Gaming Industry Myths and Facts, published in 1996. The1997 and following pamphlets were later revised to omit the bankruptcy statistics, which were unconvincing.

OTHER ISSUES and RECOMMENDATIONS FOR FURTHER STUDY


However, the three peaks in Figure 8 in North-ern Mississippi are highly anomalous. They do notappear to be attached to any casino closures, sinceall the closures in Tunica took place during or afterthe third quarter of 1994. The first upswing coin-cides with the opening of the first casino, Splash.The third increase coincides with two other open-ings, of Treasure Bay and Sam’s Town inRobinsonville. But there is no coincidence with thesecond peak, and it is not clear why the other open-ings did not lead to upturns. Nevertheless, thegrowth in bankruptcies continued to rise in North-ern Mississippi to levels above those peaks in 1997.

There was clearly an adverse impact of gaming, butit was unclear to what extent.

Crime is another major factor in gaming, and itseriously affected Tunica. The cause-effect relation-ship was difficult to determine and remains politi-cally charged. The National Gambling Impact StudyCommission concluded “beyond pathological gam-bling, tracing the relationship between crime andgambling has proven difficult.”38 The American Gam-ing Association argues that casinos do not “cause”crime, and that any serious crime increases due togambling are less than those associated with a simi-lar big-name attraction such as a major theme park.39

In either event, the direct impact on the ground mustbe taken into account.

Tunica experienced an enormous growth in crimesince the casinos arrived.40 With an increase from689 cases in 1991 to 11,100 in 1996, it is no wonderthat two of the things first built with new casinomoney were a larger court house and jail.41 Thearrest rates, however, reflect the bulging transientpopulation of casino visitors and are in that way com-parable to other entertainment draws. Tunica hasonly recently provided Uniform Crime Statistics tothe Federal Bureau of Investigation, so case filingsat the Tunica Justice Court must be substituted.This is a trend that should be analyzed and com-pared to other communities.

Infrastructure problems outlined above remainin Tunica, but the new influx of casino tax revenueimproved some of them. Highway 61, a legendaryroad along the Delta Blues trail, was upgraded froma two-lane road to a four-lane expressway throughthe county. Many of the roads, it must be noted,directly service the casinos. Indeed, in 1994 theMississippi Legislature created the Gaming Coun-

Figure 8

Source: Administrative Office of the United States Courts

0

1,000

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Western Arkansas

Eastern Tennessee

Northern Mississippi

Q 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

Personal BankruptciesTotal Chapter 13 Filings by Court District

1990-1997

38 NGISC Final Report, June 1999, p. 7-13.

39 1997 American Gaming Association pamphlet, ibid.

40 It bears repeating, that Tunica did not choose between an amusement park and casinos. Casinos were the only alternative.

41 “A Splash set off a tidal wave—Tunica’s Rolling” in The Commercial Appeal series. See also James Snyder, “Why Tunica matters:pros, cons, in debate,” in The Daily News.


ties State Assisted Infrastructure Fund to fund suchprojects. Highway 61’s four lanes will only later becontinued south of Tunica County by the state.42

Tunica town, the county seat, has seen some civicimprovements such as its new courthouse and jail.Tunica attracts some big-name acts in entertainmentto the casinos and has recently built a golf resortand taken bids on an exhibition center. But dreamsfor further development, such as an airport and con-vention center, remain in the planning stages.43

When the casinos opened in Tunica, business-men and officials in Memphis voiced concern thatgaming would draw tourists away from Memphis.This has not appeared to happen, and Memphis isundergoing a slow renaissance, with new openingsDowntown and on Beale Street, including a newTriple-A baseball stadium. Since Tunica is only a30-minute drive from Memphis, it is clear that out-side tourists can visit both, rather than one, and lo-cals do the same thing. The combination of a re-gional economic boom and the growth of gaming hasput service sector workers at a premium.44 None-theless, the impact of Tunica’s gaming on theeconomy of both the Memphis MSA and Arkansas,which declined to legalize casino gaming, deservesfurther study.

As noted above, the uncertain impact on educa-tion, and on commercial and residential developmentmust be examined more closely. With uniform test-ing results, in several years the impact of massiveeducation spending may be evaluated. It is still notclear how self-contained casinos have helped second-ary commercial development, which can only be de-termined with a comprehensive analysis on theground. Similarly, how Tunica attracts and retainsnew residents could perhaps only be determinedthrough a county-wide survey conducted over manyyears.

CONCLUSION

Tunica County is a model example of what hap-pens when gaming is aggressively injected into a lo-cal economy. The fact that little else existed prior togaming allows us to explore in extremis the effectsgaming has on communities across the country.Tunica’s experience should be studied further tolearn from development successes and failures.

Overall, Tunica’s experiment with gaming hasbeen positive. It has also been lopsided. It has liftedthe extremely poor out of abject poverty. It has cre-ated huge numbers of jobs, attracting workers acrossthe entire region. It has stimulated the regionaleconomy, but with uneven effects. More than any-thing else, it has changed the landscape and cultureof a community mired in a seemingly permanent de-pression.

There are a few important lessons to learn fromTunica. While nobody in the county could have pre-dicted the success they would have bringing casinosand gamblers to Tunica, some foresight in planningwould have benefited the county more. Preparingschools, acquiring property for housing under emi-nent domain, and subsidizing and encouraging linksbetween the casinos and secondary developmentcould have spread wealth and avoided the problemsof slow expansion in other sectors of the localeconomy. Clearly, public services such as water andsewer, hospitals, and a unified fire and police dis-trict would have eliminated the disincentives to sec-ondary growth and investment in Tunica.

Such lessons will be better learned with the con-tinuing study of Tunica. Similar microeconomic sur-veys in other communities, combined with more ex-tensive research on causes and effects on the ground,will help those communities and others hone thepowerful economic tool of gaming.

42 65 percent of county gaming revenue fund road construction. “Casino boom spurs Tunica civic growth” in The Daily News(Memphis), June 12, 1996. The Highway 61 expansion project started with the 1987 Four-Lane High Way Program, but speeded upunder the 1994 Gaming Roads Program.

43 David Flaum, “More Fabled Tunica Growth on Tap,” The Commercial Appeal, May 6, 1999, Page C1.

44 “Unemployment up after Casino debut” in Ibid.

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