The Impact of Hurricane Katrina on Mississippi's Casino Industry

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Academy of Strategic Management Journal




This research analyzes the impact of hurricane Katrina on gaming revenues and taxes in Mississippi. The magnitude and duration of the losses resulting from Katrina are empirically estimated with ARIMA forecasting models. Both state and local tax losses are estimated by region within the state. The findings include a substitution effect between the gaming regions in Mississippi after Katrina closed the majority of Gulf Coast casinos. The substitution effect leads to a reallocation in local tax revenues between the regions within the state and an offset of the negative impact at the state level. The overall shortfall and recovery time are shown to be far less than early estimates. The research concludes with a discussion of the potential for far greater losses if gaming laws are not further modified.

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