After swift backlash from existing casinos and some Republican lawmakers, a state House leader says he will let his bill to give special treatment to an unnamed developer to build one in downtown Jackson die in his committee.

In a move that caught gaming regulators and the Mississippi casino industry by surprise, a bill being fast-tracked in the House on Tuesday would have allowed — and provided state support — for a casino on the Pearl River in Jackson.

“As encouragement to the people who had requested this bill and been willing to put their money where their mouth is, so to speak, and offered to invest literally somewhere pushing $1 billion in the city of Jackson — don’t give up hope,” House Ways and Means Chairman Trey Lamar said in a Tuesday committee meeting.

It appears the as yet unnamed developer of this casino would have received unprecedented special treatment never shown another casino in Mississippi, including state financial backing and opening one specific site in a county that otherwise does not allow legalized gambling. The measure would appear to have gone against three decades of state casino policies including a “level playing field” free-market system for potential developers.

The Mississippi Gaming and Hospitality Association, which represents 26 member casinos across the state, also quickly sent a letter in opposition of the move to Gov. Tate Reeves and legislative leaders on Tuesday.

“This legislation will authorize an expansion of gaming that is unprecedented in the 34 years since legal gaming was authorized,” the letter said. “From the inception, legal gaming has been strictly limited to certain statutorily described areas of the state … the three most southern counties … or on the Mississippi River …”

The letter says many casinos have already been hard-hit by legalized gambling in neighboring states and allowing special treatment for one developer to open in Jackson would “divert the single largest source of customers” in state from there and would hurt the river casinos and devastate Vicksburg.

The letter also noted that lawmakers, when they allowed Coast casinos to rebuild onshore after they were destroyed by Hurricane Katrina, made clear gambling would not be expanded beyond the areas already being allowed in 2005. In the past, religious leaders have fought expansion of casino boundaries.

Donn Mitchell, a principal with Mississippi-based Foundation Gaming Group, which owns Waterview Casino in Vicksburg and Fitz Casino and Hotel in Tunica, said the state backing and carveout for an individual developer in Jackson would be unfair to those who have invested millions under current rules. He said the move could have a chilling effect on capital investment in current developments or legal gambling areas statewide — with companies fearing shifting sands of state casino regulations and jurisdictions.

“We are not opposed to competition, and have nothing against Jackson, but changing the rules midstream after we’ve invested tens of millions of dollars — with no state loans — to restore a troubled casino is not fair,” Mitchell said. “We know Jackson needs development, but so does Vicksburg. The two industries in Vicksburg are gaming and the Corps of Engineers and you’re talking about gutting one of them.”

Democratic Rep. Oscar Denton and Republican Rep. Kevin Ford, both from Vicksburg, said they oppose the legislation because it would likely cause residents in the Jackson metro area to stop visiting Vicksburg casinos, a crucial anchor of the Warren County economy.

“Anything this close would affect us greatly with employees, economically,” Denton said. “It would affect us greatly. There’s no question about that. We both want Jackson to thrive. But we want to try and help it another way.”

The House GOP caucus met behind closed doors at noon for its usual weekly meeting, and enough of its members were opposed to ensure the measure didn’t have enough votes to pass the full chamber, according to Ford.

Lamar, a Republican from Senatobia, late Monday filed House Bill 1989, for the state to provide loans and borrow money to help a casino development in the Jackson Capitol Complex Improvement District.

The bill would sidestep the normal processes for a casino, and is aimed at helping only the one developer, unnamed in the bill. It would create a special fund for the project, and provide loans and issue bonds.

Lamar told Mississippi Today on Tuesday morning that the state-sponsored loan spelled out in the legislation would be used to develop infrastructure around the proposed casino site.

“You’re adding a (casino) license on a river that is currently not allowed,” Lamar told Mississippi Today on Tuesday morning. “Right now, the casinos are allowed on the Coast and along the Mississippi River. This would allow the same thing for development on the Pearl River.” 

Both the director of the state Gaming Commission and the head of the Mississippi Gaming and Hospitality Association said they were caught by surprise by the proposal.

Mississippi’s casino industry has been praised for operating on a free-market system, with all developers going through the same licensing and other processes on a level field and the state has not in the past financially helped an individual project. The state has to-date avoided the scandal, corruption and organized crime that some other states have seen with legalized gambling — often centered around permitting and licensing developments.

“Most people look at that (free market system) as what has helped our system be successful,” said Jay McDaniel, director of the Mississippi Gaming Commission. “… All I can tell you is this is pretty much a surprise. The Gaming Commission has not been consulted … The question for me is, who makes the decision who gets that license?”

The bill says the site of the casino development would be within 6,000 feet of the state Capitol, owned by someone already operating a casino and would have a minimum capital investment of $500 million.

The bill would not open up other locations along the Pearl River for casino developments. Instead, Lamar said the bill only allows for developers to construct one, single casino in downtown Jackson because “nobody else has asked.”

“If somebody wants to come in on the other side of the Pearl in Rankin County and put in a competing billion-dollar casino, I’m sure we would look at that as well,” Lamar said. “You want to talk about an economic game changer for downtown Jackson and the CCID. This is 2,000-plus jobs.” 

Larry Gregory, director of the Mississippi Gaming and Hospitality Association, as he waited outside the Ways and Means committee room Tuesday, said he and member casino operators were also caught by surprise by the measure.

A Senate leader on Tuesday said that former Gov. Haley Barbour has recently pushed the casino development with state lawmakers.

Senate leaders, including Lt. Gov. Delbert Hosemann, appeared to know little about the proposal. Hosemann said if the bill comes over from the House, “then I will look at the bill,” and that he would not comment as, “I have not read it yet.”

Senate Finance Chairman Josh Harkins, R-Flowood, Lamar’s counterpart in the Senate, said, “I don’t know really anything about it. I just heard it start being mentioned.”

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