Legalized gambling lifts a depressed town (cont.)

By Stephanie N. Mehta, Fortune senior writer

Williams is something of a Tunica pioneer, part of a small group of black homeowners in a county where blacks have historically been tenants, first as sharecroppers on farms, then as renters in places like Sugar Ditch, and more recently in some of the new apartments that have sprung up around the casinos.

Williams's home is off U.S. 61, the famous Blues Highway. (Blues founding father Robert Johnson spent part of his childhood in Tunica, and the crossroads where he is supposed to have sold his soul to the devil is in Clarksdale, 45 miles to the south.) But Williams's home is one of only 21 units in the Alpha Creek subdivision, a lonely row of small, tidy houses.

To the north, near the Tunica National Golf & Tennis Center, new homes are going up, but they're aimed at retirees and second-home owners, not working folks. James Dunn, a county board member who helped get the Alpha Creek homes built, says he had hoped to acquire land to build another 20 or so houses. But the landowner instead sold the property to a company that intends to develop homes priced north of $130,000 - beyond the range of many families here.

Upward mobility

Tunica may lack a vibrant black middle class, but it isn't without its strivers. It is just past 2 P.M., and lunch at the Epic Buffet at the Hollywood Casino, one of the big hotel-casinos in the Tunica Resorts area, is over. Servers wipe down tables, and the kitchen staff puts away trays of hush puppies, mac and cheese and roast beef. A few stragglers remain, and buffet manager Michael Branch, 36, wants to make sure they're happy. "How's the food?" he asks cheerfully.

Before the casinos came to Tunica, Branch was doing what most black people here did: He struggled to get by. He worked for a time at a chemical plant and also at a textile factory, making pillows and mattress covers, all for minimum wage or close to it. Branch, whose mother died in a car accident when he was 13, also worked in the rice fields to help pay for school clothes for his younger siblings. "Water up to your knees, snakes biting at your ankles," he recalls. "I never wanted to do that again."

So when Splash, Tunica's first casino, run by local entrepreneurs, was set to open in the fall of 1992, Branch was one of the first to sign on. (The big operators didn't start showing up until the next year.)

While working a series of jobs at Splash and another casino, Branch often hit the Hollywood's diner for a late-night snack. One night the supervisor said, "Y'all want to work here?" The next week Branch was busing tables; two months later he was promoted to server. Within a year he was being trained as a supervisor.

It was like that in the early days: Martha Moore-Foxx, 39, a Tunica County native who'd been working in Detroit, says she walked into the Hollywood in March 1995 for the first time, intending to do a little gambling, and wound up getting hired as a cashier. Now she supervises bartenders and cocktail servers. "I never even got to play," she says.

Moore-Foxx, who moved back to Tunica in search of a safer life for her children, says she's taken more than 400 hours of training courses at Hollywood, one of 16 casinos owned by Penn National Gaming (Charts) of Wyomissing, Pa. Branch, who now makes roughly $40,000 a year, is able to save a little money and give his children, ages 18, 11 and 2, the kind of childhood he never had. His ambition is to one day own his own restaurant.

Casinos have brought upward mobility to Tunica; they've also had an unintended social impact. At the casinos tourists and locals gamble side by side. Black and white employees work together, unlike on farms, where the laborers typically were black and the landowners white. "The casinos have bridged a gap," says Nickson, who recently became the town of Tunica's first black alderman. "It loosened a tension that was here."

Indeed, with its diverse clientele and workforce, the insides of Tunica's vast gambling halls can end up feeling a lot like casinos in Detroit or Reno, or even some of the smaller Vegas properties - with one key difference. Employees are incredibly friendly. "Southern hospitality," explains Branch. "We're just brought up that way. When you think about what people here have been through, it is amazing how nice a person still can be."

Jerry Gentry thought he'd never come back. The 1980 valedictorian of Rosa Fort, Tunica County's only public high school, Gentry excelled at Ole Miss, got a medical degree at Howard University, and was working as a naval physician when his mother died in 1993. Now 43, he came back to Tunica in 1996 to spend time with his father, who still lived here. Methodist Healthcare Systems recruited him to stay and work at a new 24-hour medical clinic it was building.

Like so many developments in Tunica, the clinic initially was aimed at serving the casinos, but local residents have benefited too. Tunica County (which has no hospital) now owns the clinic, which is open to whoever walks in. "We don't turn anyone away," Gentry says. When he first arrived back in Tunica, he says he sometimes saw patients who hadn't been to a doctor in a decade.

Gentry, who lives in nearby Olive Branch, Miss., with his wife and three children, juggles lots of demands on his time. In addition to the work at the clinic, he works one day a week at a practice in Memphis and also works as a ringside physician at boxing matches. (Nestled between pictures of his family sits a photo of him with Mike Tyson taken at a 2003 fight in Memphis.) He regularly speaks to students at his alma mater, Rosa Fort, to inspire students to go to college, work hard, get good jobs - something the casinos can now provide. "If you're a young, healthy individual living in Tunica County, and if you want to be employed, you can get a job," he says.

A diversified economy

As communities around the world look at the gaming industry as a potential cure for their economic woes, it would be tempting to hold Tunica up as a model. But its success is unlikely to be replicated. Its good fortune has been a combination of location, luck and timing. Tunica boasts 6,000 hotel rooms, and Harrah's uses the local airport to fly in high rollers, but it isn't the kind of destination Vegas is. Its clientele is older (average age: 58) Southern and Midwestern day-trippers.

County leaders are investing tax dollars in attractions such as a high-end golf course and a new river park to keep visitors coming back - to the dismay of some residents, who feel the money should be spent on locals.

Yet for all the improvements, it appears that Tunica's growth from gaming has reached a plateau. "There haven't been any new properties or considerable expansions as we've seen in other markets," says Brad Polan, an analyst for gaming-industry Web site Casino City, noting that Foxwoods in Connecticut is spending $900 million to build a new operation with MGM Grand adjacent to its 15-year-old casino.

"We've established Tunica as a tourism destination," says Lyn Arnold, president and CEO of the Tunica County Chamber of Commerce. "Now we need to diversify our economy."

To that end Arnold is marketing a "megasite," 2,200 acres of farmland the county has an option to acquire if the right employer - an automaker, say - came along. It's a tough sell.

While gambling has helped pave the way, literally, for new industry - Tunica County, which had only one traffic light in 1991, now has miles of four-lane highway wending around the casinos and 19 intersections with traffic lights - the gaming industry doesn't exactly beget an ecosystem of suppliers the way that, say, FedEx (Charts) created a whole economy of warehouses and logistics companies in Memphis.

Moreover, big employers want the kinds of things that casino money can't buy: affordable housing for employees and good schools that educate workers' kids and churn out high-quality future employees. Tunica has yet to produce those things.

The high school students at Rosa Fort today have never known Tunica without casinos. Thanks to casino tax revenue, Tunica's schools now pay good teacher salaries by Mississippi standards, and a brand-new middle school lies halfway between the town of Tunica and the casinos.

Yet Rosa Fort students aren't a whole lot better off academically than before the casinos arrived. More kids are graduating from high school - there's no way to know for sure, since no one tracked graduation rates in 1991. (The 1990 Fortune article on Tunica said about one in three students graduated from high school; today that rate is 87 percent.)

But only about 60 percent go on to further schooling, and the high school currently is ranked two, or "underperforming," on a five-point state scale. "It is like Tunica suffers from a hangover from 100 years of poverty," says Ronald Love, who was hired to supervise the schools when the state took control of the district in 1997 for failing to meet basic performance measurements.

"There are vestiges of it everywhere: in education, in local politics, in the housing. And when you have been the poorest of the poor, well, an infusion of resources might lighten your load, but you still have the hangover."

Just recently a big development company said it was planning to build an upscale family housing and shopping community just north of the casinos. If it weren't for the casinos and the roads Tunica helped pay for, the Chamber of Commerce's Arnold says, the developers wouldn't have come. Yet it is neighboring DeSoto County, with its robust public schools, that will claim the new homeowners as residents and taxpayers.

Still, Clifton Johnson, Tunica's county administrator, is optimistic. Whether that optimism is justified is another story. What might Fortune see on a return visit to Tunica a few years from now? Johnson's response is measured: "I'd like you to see at least two different airlines flying into our airport every day. New housing. A good school system. I would want you to see another major attraction, a new casino." For all the talk of change, Tunica may be destined to be a casino company town permanently.

Reporter Associates Eugenia Levenson and Joan L. Levinstein contributed to this article.

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