A 20-Year Roll
An inside look at two decades of Tunica County gaming and how it changed the Mid-South.
Memphis Flyer | by John Branston
Hail, Hardface. In addition to having one of the great nicknames of all time, Hardface, whose real name was Harold Clanton, was in some ways the grandfather of Tunica gambling. He had a tough look that worked — think Morgan Freeman in a bad mood — and ran several illegal gambling joints in Tunica from the 1950s until he died in 1982. His businesses made him one of the Delta's few black millionaires. He broke a lot of laws in the process, but history has sanitized his sins. On historic markers, he is remembered as an "entrepreneur." Well, why not? A lot has changed since the modern form of "dockside" gambling was legalized 20 years ago this month in a special session of the Mississippi Legislature. It was called House Bill 2 and created the Mississippi Gaming Control Act. The backers never envisioned that it would create a gambling empire in one of the poorest counties in America. "Maybe one boat" was the way they talked, boats being riverboats, which was what the casinos were originally supposed to be. That proved to be one of the great miscalculations of all time, for a lot of reasons. One of them was Hardface. Many Tunica residents were not strangers to gambling or the intricacies of cards and craps. So when casinos got their foothold in the county in 1992, there was a supply of labor that knew the business — at least in rough form — and some visionaries who knew the potential for profits in gambling.
The successors to Hardface had, if not hard faces, at least hard minds and hard numbers that supported business plans that were hard to believe. They included brothers Rick and Ron Schilling, the owners of Splash casino, the first casino to open in Tunica County; Bill Boyd, the CEO of Boyd Gaming, who paid a then unheard of $25 million for the site of Sam's Town; Jack Binion, the canny, unassuming operator of Horseshoe, who sold out to Harrah's for $1.45 billion; and Harrah's Entertainment, the former Memphis-based company that bought out Horseshoe, Grand Casino, and Sheraton.
Twentieth anniversaries are occasions for recalling "landmark legislation," a phrase that has been overhyped with regard to health care, bailouts, and stimulus bills. But House Bill 2 really was a piece of landmark legislation. Nobody knew it, but Mississippi and Memphis would never be the same. The bill legalized dockside gambling on the Mississippi Sound and the Mississippi River. The best guess was that there would be three casinos — actual boats, mind you — on the coast and three more on the river. One of those, the longest of long shots, would be in Tunica, which was dirt poor but just 30 miles from Memphis. Dockside gambling got off to a slow start due to restrictions on where and how the casinos could be built. The first two boats opened on the Gulf Coast in 1992. But three years later, the rules had been changed, and there were nine casinos in Tunica County with no resemblance to a riverboat, and Memphians were spending an estimated $300 million to $500 million a year in them.
House Bill 2 had created a Southern gambling destination that would rival anything outside of Las Vegas. By 1996, Tunica County had more slot machines (11,114) than residents. It was a law that touched Memphians' everyday lives, if not directly then indirectly via the Tennessee lottery, the Memphis Grizzlies, the expanded concert scene, politics, religion, advertising, cotton farming, airports and highways, Beale Street, and the stock market. It changed the way we think about politicians and what it means to be socially conservative and liberal. The conservative Republican governor of Mississippi, Haley Barbour, is staunchly pro-casino. The liberal congressman from Memphis, Steve Cohen, is the father of the state lottery, Tennessee's answer to legalized gambling in neighboring states. In simplest terms, both men are pro-gambling. The equation of gambling and sin is no longer a topic of serious public debate. It changed — or maybe saved is a better word — the local media. If form holds, the newspaper you're holding will have four or five pages of full-color casino ads in it. Over the course of a year, that adds up to several hundred thousand dollars to help pay the salaries of this company's 48 employees. Add in the revenues that The Commercial Appeal and local television and radio stations take in, and the impact of casino advertising on local media can be measured in millions of dollars. It changed the way we think about entertainment. The nine Tunica casinos (Bally's, Fitzgerald's, Gold Strike, Harrah's, Hollywood, Horseshoe, Resorts, Sam's Town, and Tunica Roadhouse) took in nearly $1 billion last year, with an estimated 30 percent of that from the Memphis market. Casinos all but killed the Mud Island Amphitheater. The Pyramid, which opened in 1990, failed for a lot of reasons, one of which was competition from Tunica for entertainment dollars, especially concerts. FedExForum and the relocation of the NBA's Grizzlies to Memphis were, in part, a response to the casinos. It changed the way we think about business. Casinos invested billions in hotels and restaurants, without the incentives demanded by manufacturers and service companies, because gambling is so lucrative. Publicly owned companies funded much of the construction and the debt, and thousands of investors profited. It changed spending priorities for state and local government. Tunica, with a population under 10,000, boasts a commercial jet airport and the only completed link of Interstate 69 in the Southeast.
House Bill 2 also changed the lives of the three men riding in a car with me on a Saturday morning last week, headed from Memphis to Tunica on a short road trip into history. My companions were casino insider Herbie O'Mell, who has played host to thousands of high rollers; Beale Street insider Bud Chittom, co-owner of Blues City Café and other restaurants; and Bobby Leatherman, a Memphis lawyer from one of Tunica's oldest and wealthiest farming families that sold sites to the casino companies. O'Mell helped open Splash casino in Tunica, a 75-minute drive from Memphis on a dangerous two-lane highway. It was his idea to charge a $10 admission fee. "The owners said I was crazy. I said, 'I'll tell you what, let me do the marketing. Let's start off with it, because if you start the other way you can't go back. Let's see what happens, and you all can fuss at me.' It turned out it would take eight people each night to collect the money. From the first month to the last, the lowest month we had was $400,000 to the bottom line, just from the $10." There was a torrential storm on opening night, and the canopy covering the lines of people waiting to get in blew away. Owner Rick Schilling, watching the spectacle unfold, marveled, "What a business." The $10 admission stayed in place until Harrah's opened more than a year later. Splash literally made too much money to count it all. "We had the cash in laundry bags all over the cage," O'Mell said. "And the gaming commission shut us down for 72 hours. It took us that long with money counters to count the money so we could open back up." Splash actually doomed itself by showing that "dockside riverboats" could be barges floating in a lagoon next to rather than in the river. Once the engineering was accomplished, it was just a matter of building canals to sloughs farther and farther from the main river and getting the necessary accommodation from the gaming commission. Leatherman, whose parents live in a house flanked by a tennis court and an Indian mound near Robinsonville, leased the land for the first Harrah's casino. "After Splash took off, the interest picked up," he said. "I went from getting a call every six months or so to getting a call a day. Harrah's was local and the biggest, so we worked out a deal to lease a site to them. I have always attributed Tunica's success to Harrah's decision to come down here. There was a feeling that if they are going in there, then we are going in there."
The most aggressive of the newcomers was Boyd Gaming, a Las Vegas operator named for founder William Boyd. Boyd had a plan for a full-scale resort with a hotel, restaurants, entertainment center, and indoor parking and wanted to buy its land rather than lease it. Leatherman's cousin, Shea Leatherman, made the sale, with the help of real estate friends Phil Zanone and John Pitts. "Nobody had any idea what to ask for it," Bobby Leatherman said. "I think they may have thought $6 or $8 million, who knows. They zoned off 150 acres. They sat down and met with Boyd, and Shea told them they really didn't want to sell, but they would entertain an offer. They were having lunch, and Bill Boyd said, 'We will pay you $18 million.' That was the first offer. Phil said he looked down, because if he looked up he knew his poker face would melt. He said he needed to excuse himself to go call Shea's brother, who lived out in California, and check with him. So they walked outside, and Pitts tells him they can get more. So Shea says, 'All right, John, you can have a piece of whatever extra you get, but if you screw this up, I am going to kill you right here and now.' So they go back to the table and say how they really didn't want to sell, but if they did they had to get $25 million for it. Bill Boyd looked at them and went, 'Done.'"
By 1996, there were nine casinos operating within an hour of Memphis, all of them booking entertainers and stealing employees from each other and from restaurants in Memphis. An entertainer who could get hooked up with Harrah's might play seven or eight different casinos over three months. "After the casinos built their auditoriums, they started doing what is called soft tickets," Chittom said. "Somebody that can't sell a hard ticket on their own would comp places. The same people that book fairs and festivals would book casinos. So you started seeing the Beach Boys and A groups that are now B groups. "Delbert McClinton was making $7,500 a night before the casinos started. Then George Klein and Herbie booked him at the Horseshoe at $25,000 for two nights, and the next casino would give him more. Delbert is not a has-been. The same goes for Don Henley of the Eagles. The people they draw bring money." Casino hosts like O'Mell and Klein made a nice living as go-betweens for the casinos and entertainers and high rollers. "It's hard to tell which entertainers are successful," O'Mell said. "The reason why is that it makes no difference whether they fill the hall up or not. They go back and they look at that date from a year earlier and see what the drop was in gambling. The house might be a third full, but somebody and his wife who loved that act might have walked into the casino and lost $200,000. That's a successful night, if you see what I'm saying." Chittom said the competition was cutthroat for a while: "A lot of restaurants went out of business, especially on the south end of town. Mud Island got murdered. I think Houston's lost about 28 managers in the first two years. And good bartenders and waitresses. If you were attractive and could pour liquor, you were gone. That finally wore off. Beale Street is immune to it. More people come there by accident than go somewhere else on purpose. If anything, Beale has been enhanced." O'Mell said the Memphis Grizzlies and their non-compete clause hurt the Memphis entertainment market more than the casinos did. "It got so bad with their first right of refusal that Sesame Street could not play the Pyramid, so the show went to the DeSoto Civic Center. That is why the Pyramid closed. The dozen top acts play FedExForum and that's fine, but the act that draws 6,000 or 8,000 isn't going to play here. They're going to Mississippi or Little Rock."
High rollers get the glamour treatment, which now includes chartered flights direct to Tunica's new airport, limousines, and luxurious hotel suites. But slot players are the backbone of the casino business, generating about 80 percent of the revenue. A typical scene on a gambling floor is hundreds of patrons, many of retirement age, hunkered over slots handling anywhere from one penny to $10 or even $100 a pull. The bucket of coins is an anachronism, replaced by a simulated sound and a paper ticket.
Tunica's most famous operator was Jack Binion, known for his humorous aw-shucks commercials and his no-nonsense management. Binion would walk the floor a lot, mingle with the help and customers, and pick up trash himself. And he was known to take even the largest bets. O'Mell tells this story: "I'd go over to him and say, 'Jack, this gentleman wants to play big.' He'd say, 'Okay, I'll tell you what. Whatever your first bet is is your limit. If you want to bet $100,000 on the first card out, you can play $100,000 limit.' Because when you make that first bet, you're playing with your money." Binion sold out in 2003. The business has become less personal and more numbers-driven, at least in O'Mell's mind. He tells the story of a customer who came to him with a problem: "He and his wife had been playing a lot and wanted to go eat at the steakhouse. So the casino guy goes away and comes back with one comp to the steakhouse and one comp to the buffet, based on their amount of play. And the guy said to me, 'Well which one should I give my wife?'"
As for Tunica County, cotton farming did not go away. There wasn't as much production in 2009, but Leatherman said that was because prices were so low. "Shea still farms cotton, and my dad is retired, but he rents land to a guy who farms a lot of cotton. Come back in the summer, and these fields will be cotton." A lack of rooftops and better public schools in adjacent DeSoto County have kept population growth to a minimum. With roughly $30 million in casinos taxes coming in every year, Tunica County is long on amenities and public improvements but short of major grocery stores and drug stores. At the insistence of Paul Battle, the late former president of the Tunica County board of supervisors, the casinos have to build everything themselves, including roads, sewers, and a water system. There are no city property taxes. There is some sign of diversification, with a German company building a pipe manufacturing plant east of Highway 61. "Haley Barbour brought it in," Leatherman said of the new plant. "He is going to be term-limited as governor. I would be in favor of changing the state constitution to make him King Haley." What are the odds?