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Riverboat casinos going nowhere fast

Thirteen years after riverboat gambling returned to the Mississippi River, only one of the elegant boats still cruises the channel; the others are permanently docked,'s Mike Brunker reports.
The U.S. Admiral, one of the first riverboats to offer gambling in  Missouri in 1994, is now permanently docked on the St. Louis waterfront, still open for business even though the parent company of its President casino is bankrupt.James A. Finley / AP
/ Source: An Special Report

When riverboat gambling returned to the Mississippi River in 1991, supporters spoke fondly of quaint excursions that would transport patrons back into Mark Twain’s world, providing a “family, Disney-like experience,” as one riverboat operator put it during a legislative hearing. More than a decade later, however, the reality of these watercraft of chance bears little resemblance to those early visions, most notably because only one of the 30 boats on the river still cruises on a regular basis.

Many of the floating palaces of fortune that cling to the Mississippi’s banks like mussels in the five states where they are legal still look like the elegant steamboats that plied the river in Twain’s time. The resemblance ends at the waterline, however, as many have no engines, and those that do rarely, if ever, fire them up and weigh anchor.

Others — the so-called “boats on moats” — don’t look anything like floating wedges of wedding cake, a description applied to the paddle-wheel steamboats of old. These “vessels” are large barges designed to float in pools adjacent to the river with casinos on their decks.

Not your ‘Maverick’ setting
While not yet on a Vegas scale, many of the most successful riverboats are a far cry from the modest boats that set sail in 1991, boasting fancy restaurants and entertainment in addition to their gambling floors.

But they don’t look like rooms where Brett Maverick would feel at home, either. While poker tables and other table games exist, the vast majority of their floor space is taken up by jangling, buzzing and beeping slot machines.

Critics of the boats find the atmosphere depressing.

“This isn’t Vegas-style gaming where you at least have the illusion of grandeur,” says Kevin Horrigan, a St. Louis Post-Dispatch editorial page columnist who has written critically about the riverboats. “This is just people in smoky rooms pulling handles.”

But the boats’ owners say the naysayers are letting their prejudices cloud their vision.

“It’s fun, it’s reasonably priced — our average customer spends less than $50 — they get good food and maybe a show. They just relax,” said Bernard Goldstein, chairman and CEO of Isle of Capri Casinos of Biloxi, Miss., which operates 12 casinos, most of them riverboats.

The lone gambling boat still plying the big river is the Mississippi Belle II in Clinton, Iowa, which sails from 1 to 3 p.m. each weekday during the cruising season from mid-May through mid-October.

‘Everyone else has gone dockside’
“As far as I know everyone else has gone dockside,” said Ken Bonnet, president of the company that runs the boat. “We are in the process of evaluating the feasibility of building a new facility. If that’s economically feasible, we may get away from cruising as well.”

Bonnet said his boat’s situation is unique among Mississippi operators because it receives busloads of gambling tourists from the western suburbs of Chicago and elsewhere through a contract with a tour operator.

“They are the ones who like to cruise,” he said of the tourists. “Most of the people who live closer to the water have no interest in it.”

Riverboat operators say it became clear almost as soon as the first gambling cruise left the dock that their demise was in the cards.

“When it got started, the gambling was supposed to be penny ante and it was the cruising experience that was the thing,” said Goldstein, the casino executive. “But the bettors didn’t like cruising. When they wanted to get on, they wanted to get on, and when they wanted to get off, they wanted to get off.”

Goldstein said that point was driven home when his company put two licensed riverboats on Lake Charles in Louisiana to take full advantage of a now-repealed provision of the state law requiring gambling vessels to cruise for two hours for every two hours they were open at the dock.

‘You'd see a big rush down the dock’
“When the one boat came back and the other was getting ready to leave, you’d see a big rush down the dock from the departing boat to get on the other one,” he said.

Legislators in the five Mississippi River states where riverboat gambling is legal — Illinois, Iowa, Louisiana, Mississippi and Missouri — have accommodated the operators by removing cruising requirements from laws authorizing riverboat gambling. Iowa became the last state to do so this year, prompting its riverboats — except for the Mississippi Belle — to quickly drop anchor.

While the riverboat operators say the change was market-driven, gambling opponents such as Tom Gray, executive director of the National Coalition Against Legalized Gambling, say the landward crawl was part of the plan from the beginning.

“This thing (gambling) slithered out of the water and onto the land faster than anyone could ever track,” said Gray, a retired Methodist minister. “The only way they could sell this was quaint riverboats and entertainment. The Midwest states never would have bought hard-core Las Vegas-style casinos.”

But Sebastian Sinclair, a gaming analyst with Christiansen Capital Advisers, said that while the riverboat operators undoubtedly hoped that they would have the opportunity to expand their operations onto the land, it would have been foolish to make plans based on that eventuality.

“That’s your hope, but if you’re a smart businessman you never go into it assuming that you’ll have an opportunity to expand your operations,” he said. “It also can go the other way. You go in assuming they’re going to issue 10 licenses, but then they issue 10 more. Or the state may decide to raise your taxes, like they did in Illinois. And there’s always the issue of what may happen in a neighboring state that could affect your business.”

Politics the difficult part
“That’s one of the fascinating things about this business. It’s not like making widgets. The economics of this industry are not that difficult, but the politics are.”

The economics are problematic for governments that have turned to gambling in search of new tax revenue without raising citizens’ taxes.

As the Mississippi Belle’s reliance on the busloads of tourists demonstrates, many assumptions about riverboat gambling — including the notion that it would prove to be a popular tourist attraction — haven’t held water.

“The campaign was sold on the idea of quaint little boats going up and down the river, which would be a tourist attraction, but that isn’t what we got,” said Horrigan, the Post-Dispatch editorial writer. “Three-quarters of the money comes from local people, and most of that is cannibalized from other businesses, according to studies I’ve seen.”

Operators of the gambling boats agree that many of the boats along the river do cater mainly to locals, but they dispute the notion that they are a drag on the economy, noting that they have created thousands of jobs in addition to generating new tax revenue.

While the economics of the riverboats are open to debate, advocates on both sides of the issue agree that political gamesmanship is the reason that the five states that allow riverboat gambling have refused — with a single exception for the city of New Orleans — to permit land-based casino gambling. That gives the legislators the ability to say they did not vote for expanded gambling, they say.

“Maybe if it’s on the water, the water floats the sin away,” said Goldstein, the casino executive.

‘A stupid law’
“It’s a stupid law,” said Horrigan, referring to the removal of a cruising requirement in his state’s gambling act. “Companies come in and dig a huge trench, put a barge in it, build a casino and then run a pipe from the river and fill up the moat with water. It’s transparent, and it’s not what the people of Missouri thought they were getting.”

The rewritten laws have created some absurdities for those in the riverboat gambling business.

Goldstein said that his company still has to have a licensed captain on board and conduct man-overboard drills on its riverboats in Louisiana, even though they haven’t left the dock in more than a year.

But he said that he believes legislatures will eventually loosen the restrictions that require the riverboat operators to maintain their maritime façade.

“You can say it’s silly, but I call it evolvement,” he said. “Heck, I thought everyone (on the gambling cruises) would be out on the decks, watching the locks and learning about the river. I’ve evolved too.”