HATTIESBURG – What’s
good for gaming is also good for local retail, according to a recent
study from The University of Southern Mississippi.
A 12-year analysis of Mississippi counties with casinos
shows the two with the heaviest development – Harrison and
Tunica – draw the most retail business from surrounding counties
The study, conducted by economics professor Dr. Charles
Cartee, examined retail and personal income data supplied by the
Mississippi State Tax Commission and the Bureau of Economic Analysis
from the period 1990-2002.
Unlike other studies that have focused on the economic
impact of gaming on local economies through employment and income
changes, Cartee’s study measured the changes in “retail
pull factors” in gaming counties. Retail pull factors (RPF)
are generally accepted measures of the extent a local economy serves
as a retail trade center.
“Retail pull factors illustrate whether
a local economy pulls shoppers and trade from another area, or if
local residents shop outside their local area for goods and services,”
Calculating a county’s RPF is made possible
using a simple formula: the ratio of a county’s retail sales
as a percent of its personal income, which is then divided by the
ratio of the state’s total retail sales as a percent of the
state’s personal income. The state ratio serves as the baseline
case, which is then divided into each county’s ratio.
An RPF greater than one indicates the county is serving
as a retail trade center and is drawing shoppers and their dollars
to the county from outside the area. An RPF less than one would
indicate that county residents are shopping outside the county for
certain goods and services.
Although similar studies have been conducted, Cartee
said he wanted to look at numbers affecting the eight Mississippi
counties with casinos over a longer term prior to and after the
introduction of gaming.
The first casino in Mississippi opened in Harrison
County in 1992, and since then, the number has grown to 31 casinos
in eight counties. Although Harrison County has the most casinos
with 11, Tunica County, with its 10 casinos, has experienced the
most dramatic effect in retail sales, Cartee said.
“Before the introduction of gaming, Tunica
County had a retail pull factor below one, meaning it was not a
strong retail trade center. By 1997, the retail pull factor had
jumped to a staggering 4.90, a 405 percent increase, which was the
largest RPF in the state,” Cartee said. Part of Tunica County’s
success can be attributed to its proximity to Arkansas and Tennessee,
“One would expect a large draw of out-of-state
patrons, especially Memphis,” Cartee said. “These areas
probably account for a significant portion of the out-of-county
expenditures and the marked growth in Tunica County’s RPFs
over the past few years.”
Although Harrison County has historically served
as retail trade center, Cartee’s research shows that gaming
has served as a catalyst to increase further growth along the Gulf
Cartee said, “Since a majority of patrons at
Harrison County casinos are from out of state, this would appear
to be an expected result.”
Chevis Swetman, president of People’s Bank
in Biloxi, said one of the most important factors in the correlation
between gaming and retail sales is room capacity at casinos.
“That’s one of the things we’ve
always tried to get into the Gulf Coast market is the idea of ‘extended
stay.’ The longer people are willing to stay, the more money
they will spend on entertainment and at restaurants and retail shops,”
Swetman said Las Vegas has benefited by balancing
gaming and nongaming revenue, and he thinks casinos on the Gulf
Coast should follow suit.
“What we’re seeing now is the more
rooms a casino has, the more opportunities people have to stay a
longer period of time. That has a lot to do with increased sales
(in Harrison County),” he said. Swetman noted the addition
of 400 new rooms opening this month at the Isle of Capri casino
and the opening of the new Hard Rock Café Hotel and Casino
as evidence of this philosophy.
In counties with less development -- in this case
one to three properties – the impact on RPFs was mixed, according
to Cartee. In fact, Neshoba County, which has only one casino development,
had an RPF rating that moved from under one to over one in the 1990-2002
period. Hancock County had an RPF well under one in 1990, and although
it moved slightly during that period, it did not break the barrier
(1.0) to reach a retail trade center status by 2002.
For more information about the study, contact Dr.
Charles Cartee at (601) 266-4809.