May 10--BILOXI -- Financial experts said Thursday the financing market for casinos is bad but is getting better and the future for Coast casinos still looks bright.

On the final day of this week's Southern Gaming Summit, the "Fighting for Finance" presentation was encouraging for developers of small casinos in regional markets.

Margaritaville Casino was the winner in the current economy, squeaking in just ahead of the credit crunch. The proposed casinos that lost in the economic slowdown were any with a condominium component. "These are projects that really fell apart," said Scott Fisher, managing director of The Innovation Group.

"For every one project that makes sense down here there are five that we looked at that don't make sense," he said. He advises Coast casino developers to build in phases and "slowly develop up."

The panelists were more bullish on regional markets like Mississippi than destination markets such as Atlantic City and Las Vegas that Fisher said "are in fact having trouble attracting capital to do the large projects."

Although the number of people visiting Las Vegas is down only half of one percent, visitors are spending less, said Steve Croxton, managing director of gaming and leisure for Investment Banking Group. Not so much on the casino floor, but revenues have dropped for Vegas hotels and restaurants. Even in a recession, people look for value in their entertainment, he said.

"The bubble has been burst that gaming is recession proof," said Alex Picou, managing director of gaming, travel and leisure for KeyBanc Capital Markets. There are so many more companies in the casino business nationwide now than there were in the economic slowdown of 1995. That casinos are also feeling the credit crunch shows "we're an integral part of the economy now."

Stephen Turpin, manager-director for ORIX Finance, said the Gulf Coast has a number of highly favorable factors for casino development: a low cost of living, great regulatory support and a good return on capital. "This would be one of the markets where I'd want to put my money," he said.

The key to long-term growth is for Gulfport-Biloxi International Airport to create traffic from other parts of the country within a two-hour flight. Short-term, he thinks couples will drive together to the Coast casinos rather than fly to Las Vegas and pay for high-priced resorts.

Still, the Coast needs to develop Vegas-style attractions to draw people here. "Gamers have gotten spoiled by getting some top flight amenities," Turpin said.

"I think the Coast can be what Atlantic City would like to be," said Picou, with the combination of the beach and world-class casinos and amenities. "The casino industry is part of an economic puzzle," and he said casinos need to define their market space. "It's your facility. It's your food offerings. It's the hospitality. That's how you create an identity."

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