PHILADELPHIA, Miss. – Neshoba County faces a daunting start to 2009 as one of its economic cornerstones lays off more than 500 workers.
Citing a weak economy that has significantly affected gaming facilities nationwide, Pearl River Resort on Monday announced that 570 staff positions will be eliminated and its Golden Moon Hotel and Casino now will operate only on weekends instead of seven days a week.
The Mississippi Band of Choctaw Indians operates the resort and casino.
The job eliminations for nontribal staff positions are being made throughout the resort, which includes two casinos and hotels, a golf club, a water park and 16 restaurants.
Cutbacks at county's largest employer are widely felt
"It's disturbing to lose 570 jobs," said Philadelphia Mayor Rayburn Waddell. "Whether (people) make $25,000 or $100,000, that's a huge impact. I think it's going to hurt for a while. It's scary."
The reductions will leave the resort, the county's largest employer, with about 3,000 tribal and nontribal workers.
Resort officials said the area's gaming market wasn't ready to host a second casino when Golden Moon opened in 2002 to complement Silver Star Hotel and Casino, the resort's flagship attraction.
Since then, Golden Moon has severely eaten into the resort's profits to the tune of a 25 percent year-over-year decrease, said Warren Strain, Pearl River Resort's director of communications.
Strong on weekends but costly to operate seven days a week
"It was too much casino for one market," he said. But while Golden Moon proved costly to operate seven days a week, it has done sterling weekend business, Strain said.
Thus, it will remain open from 3 p.m. on Fridays through 3 a.m. on Mondays.
Strain wouldn't say how much money is expected to be saved through the changes. He said the money will be used to support the tribe's operations, part of which includes operating Pearl River Resort.
Other parts of the complex are doing OK
Resort officials said Silver Star remains profitable and solvent. It, Dancing Rabbit Golf Club and Geyser Falls water park will continue with their normal schedules.
"We are focused on ensuring that Pearl River Resort continues to be a financially successful operation, and we are confident that these measures will prove to be beneficial to our customers, employees, vendors, financial stakeholders and members of the Mississippi Band of Choctaw Indians," resort CEO Gen. Paul Harvey sad in a news release.
But the loss of so many jobs will leave the region reeling economically, as hundreds will have to find new work.
Casinos nationwide are a bit down on their luck
Pearl River Resort's gaming operations aren't alone in feeling the economic hurt.
Ameristar Casino in Vicksburg laid off 28 people in November and 25 in August and offered reduced hours to 57 more as part of nationwide layoffs at the casino chain.
In Biloxi, Harrah's has scaled down its construction budget for the Margaritaville casino from $700 million to $500 million, pushing the opening date to later in 2010.
The worst times state Sen. Giles Ward could recall at Pearl River Resort were seasonal job reductions at nonpeak times of year.
But an economy that has kept many gamblers out of casinos nationwide has left its impact on Pearl River Resort, too, he said.
"These are very difficult economic times, and the gaming industry is not immune," said Ward, R-Louisville, whose district includes Neshoba County.
He said he wasn't aware of any effort by the tribe before making Monday's announcement to seek assistance from the state.
Other Indian casinos have taken similar cost-savings steps
Other Indian-operated casinos nationwide have made similar moves, said Kathryn Rand, a law professor and co-director of the University of North Dakota's Institute for the Study of Tribal Gaming Law and Policy.
Such casinos are especially susceptible to a weak economy because federal law requires them to be located on reservations, which tend to be rural and far from major metropolitan areas, limiting their customer base, Rand said.
How that region performs often is tied to how casinos perform, she said.
"In those areas, it's not just those on the reservations that need these jobs; it's (those counties') residents. Even the loss of 100 jobs will really hurt."
Choctaws run other businesses in the area
It is hoped that some workers could find jobs in other Choctaw businesses, which range from commercial printing and plastic injection molding to construction and high-tech manufacturing.
"Several of our nongaming businesses are hiring," said John Hendrix, the tribe's director of economic development. "We're hoping the nongaming (operations) can pick up some of those people."
The tribe operates 14 businesses, five of which are tied to gaming. One is the tribe's commercial laundry service.
Pearl River Resort is a major client for the laundry business, so that operation likely will see a drop in activity for at least the near future, Hendrix said.
Laws on where tribal casinos can operate an issue
Rand hopes dialogue can begin in Congress on relaxing laws on where tribal casinos can operate.
She said tribes can apply for exceptions now but added it's a rigorous process that requires state and federal approval.
Waddell said at least some of Pearl River Resort's job losses could soon be stemmed. He said home fiberglass and tire recycling facilities soon could open in Neshoba County, creating a total of at least 135 jobs.
He's also hopeful a proposed Mississippi Power clean-coal plant in nearby Kemper County eventually will create work opportunities for Neshoba residents, both through construction and operation of the plant.
"We've got two or three companies interested," Waddell said, "but the economy is (challenging)."