Backwater Biloxi Rebounds With Dockside Gambling : Economy: Mississippi town’s casinos create 8,000 jobs. Millions in new tax revenues also boost community.

This is not to say Biloxi was a dying town. That would be too harsh. But this one-time jewel of the Gulf of Mexico did remember its past with a wistful smile.

This is where, as far back as 1830, New Orleans socialites and upriver planters retreated to pillared mansions overlooking the Gulf’s wide beaches.

It is where France set up its Louisiana Territory capital and where Confederate President Jefferson Davis made his final home. Biloxi was as Southern as seafood gumbo, as refined as a debutante born to privilege.

But hard times took hold a generation or so ago. Travelers blew right past town on the new interstate highway, depositing their money at dog tracks in Alabama and horse tracks in Louisiana and in New Orleans’ spicy French Quarter.

By December, 1988, four in five motel rooms in Biloxi stood empty. The Hilton hotel chain pulled out of town. So did Ramada. Biloxi was becoming a backwater, and jobs were getting more scarce all the time.

Bob Mahoney, a lifelong resident and restaurateur, contemplated the vicissitudes of Biloxi and jobs in America the other night. In just a year, he said, everything had changed here. Suddenly Biloxi is a 24-hour town. Everyone who wants to work has a job. The city has a budget surplus and the county is issuing building permits at a record clip.

The naysayers had been wrong--dead wrong--he said, and all that gambling money that used to head across the state border was ending up right here at home.

“The way I see it,” Mahoney observed, “the frogs is eating the snakes now.” He paused, then went on: “My education is basically high school, but you don’t have to be a genius to figure out that this is the future. This is voluntary taxes. One day you’ll see casinos everywhere. Every borough in New York will have one.”

When Mississippi voters approved “dockside” gambling in March, 1992--largely because of the promised creation of jobs--developers gobbled up the Biloxi waterfront so quickly that a bulldozer knocked down the wall of one restaurant 30 minutes after the last meal was served.

By sunrise, the property had been leveled, paved and painted with strips for a casino parking lot. Almost before anyone knew what had happened, a priest was blessing one of the newly arrived riverboat casinos with holy water and the mayor was declaring it “a new day in Biloxi.”

Today, just 12 months after the first legal toss of dice, Biloxi’s four floating casinos--each in a steel harness riveted to the dock--have raised $5 million in new tax revenues for the city and led to the creation of 8,000 jobs. Unemployment in surrounding Harrison County has been cut nearly in half, to 4.9%.

In many ways, the changing face of Biloxi’s job market mirrors changes taking place within the U.S. economy itself. Faced with a declining manufacturing base--and the concurrent loss of union-secured, pension-producing, middle-class employment--communities are throwing the dice, literally and figuratively.

Long term, there are many unanswered questions. How many blackjack dealers can America absorb? And what risk is there in betting on an industry that essentially shuffles money from one pocket to another, producing only questionable growth in productivity, the true base of the nation’s standard of living?

But short term, legalized gambling has become an astounding growth industry. It has created thousands of jobs--44,000 in Atlantic City alone--and raised billions in tax dollars. In Biloxi, two more casinos are scheduled to open by year’s end, and applications for 30 more are on file with authorities.

The 46,000 residents here can scarcely believe that this is the same place that only yesterday was in dire straits, snoozing away the summer under a relentless sun.

“Even the people who were against gambling tell me how many good things have happened,” said David Nichols, Biloxi’s director of community development. “We’ve paid off old debts and started capital projects--roads, water, sewers--and put a cushion in the bank. I’ve been in government in different cities for 14 years, and this is the first place I’ve been that at the end of the year we actually had money to spend.

“Last month we had more gross gaming revenue than Reno. We’ve got 11 casinos in various stages along the Gulf and when they’re all operating, we’ll have more square feet of gaming than Atlantic City. And if someone wants to work in Biloxi today, he can get a job. There’s no excuse for not having a job anymore.”

Biloxi’s work force has been transformed by gambling, and yesterday’s teachers, welders and mariners have become today’s blackjack dealers, slot mechanics and VIP greeters.

Many are taking home the biggest paychecks of their lives. Except for the inconvenience of bumper-to-bumper traffic that now inches along Highway 90 on the waterfront, few can come up with any downside to the arrival of Biloxi’s newest industry.

Connie Johnson, 25, had been a secretary for Harrison County for four years. Her last promotion nudged her salary up to $6 an hour. When she decided she was ready for a career change, her father sat her down one night to teach her how to play blackjack. Johnson said she then went home and took all the 10s out of a deck and tossed the remaining cards on her ironing board. Then she spent hours scooping up make-believe blackjack hands and letting her mind absorb numerical combinations that made 21.

The other afternoon, she stood at the $25 blackjack table in the crowded President Casino, dealing out of a six-deck shoe. The drudgery of a 9-to-5 desk-bound job, she said, was something she never wanted to return to.

Although she earns only minimum wage--$4.25 an hour--and, without a union, has no real job security, she takes home around $2,000 a month in wages and tips--and for the first time no longer feels she was living on the cusp of poverty.

“At first there was a kind of stigma about the casinos,” she said. “Friends couldn’t believe I was actually going to be a dealer. Now there’s been a complete turnaround. Everyone wants to be a dealer.”

Gary Richardson, 32, who has a college degree in industrial technology, is also dealing blackjack at the President--a casino visited by 7,500 people a day--and has started saving for a house. Rose Barnes, 25, a former army lieutenant specializing in military intelligence, hired on in security and has already been promoted to lead officer on her shift. Scott Saunders, who had been an educational coordinator at a adolescent psychiatric center in Virginia, is assistant manager for slot machines and, at age 26, is on track for a career as a well-paid casino executive.

“Sometimes I wonder why it’s me who’s been so lucky,” he said. “Why me and not some guy named John Smith?”

It wasn’t long ago that the notion of legalized casino gambling in the conservative Bible-thumping South would have been heresy. But churches surrendered their ammunition to attack gambling on moral grounds when they began relying on bingo to raise funds, and the religious right has chosen abortion and homosexuality, not drink and cards, as the enemy.

With gambling now entrenched as an acceptable part of the entertainment-vacation market, like Disneyland or Nashville, Americans are betting more than $300 billion a year, a figure that is six times greater than Israel’s gross national product.

The United States leads the world in the sale of lottery tickets, with revenues in excess of $20 billion. American Indian gambling is a $6-billion industry that involves 140 tribes. Thirty-five states are in the gambling business as sponsors of lotteries, and every state except Hawaii and Utah permits some form of gambling. Less than 30 years ago no state had a lottery and the nation’s only legal casinos were in Nevada.

“We are just coming out of prohibition, and the problem is that every state wants to be the next Las Vegas,” said I. Nelson Rose, an expert on gambling law at Whittier College. “But if everyone has gambling and you can’t offer anything different as a destination, you don’t attract tourists and end up catering to the local population.

“No one cares if casinos suck money out of tourists, but when they become a black hole that starts sucking up local money, what happens historically is that within a few years casino gambling gets outlawed.”

Biloxi officials say casinos have enabled the Gulf Coast to promote itself as a complete tourist destination, but that the local economy cannot be built on gambling alone.

They say they realize that other cities will soon be competing for the gamblers from Florida to Texas who now are pouring into Biloxi and they ask themselves: Is there not a limit to how much discretionary income Americans have to gamble?

New Orleans--site of the nation’s first casino in 1827--awarded a contract in November to a partnership that plans to build the largest land-based casino in the country. Mobile, Ala., is interested in building its own casino. Tennessee and Georgia are flirting with the idea.

This raises two points for Biloxi: that the city’s regional monopoly may be short-lived and that gambling towns typically tend to become overbuilt even after the demand has been met.

In Atlantic City, for instance, seven of 13 casinos have gone through bankruptcy, said Whittier College’s Rose. Within eight months, the number of betting parlors in Deadwood, S.D., (population 3,000) grew from five to 75.

“This used to be a town,” a cashier told Louise Taylor, who covers gambling for the Biloxi Sun Herald. “Now look at what we have--a phony little amusement park.”

Three little Colorado mining towns became so glutted with 68 casinos that 20 of them failed, and three of the original five riverboat casinos in Iowa were gone within two years, sailing downriver to Missouri and Mississippi--where the owners smelled bigger profits.

“As with any industry, there is a saturation point in gambling, but I don’t think we’re even close to reaching it yet,” said Candace Fox, a gambling consultant in Reno.

“Once that point is approached, you’ll see some closures, in the Gulf or wherever. The survivors will be the ones that sell the best product with the best marketing in the best niche. Gambling’s the same as any business in that respect.”

For now, there’s plenty of business for the Biloxi Belle, the President, the Isle of Capri and Casino Magic. A minimum-wage town has gone to work and is paying its bills. As dealer Pam Cospelich, a former municipal secretary who now earns as much as her husband does at the shipyard, put it: “Thank goodness.”